Those wrestling with the great culinary-philosophical dilemmas of our time – are jaffa cakes actually cakes or just up-themselves biscuits, is putting chorizo in paella really an act of gastronomic terrorism, and what kind of monster doesn’t love Marmite? – can give thanks to the Irish supreme court. Earlier this week, it brought clarity to an important, if less bitterly contested, debate.
In a judgment published on Tuesday, the court ruled that the bread served at Subway, the US chain that hawks giant sandwiches in 110 countries and territories, could not in fact be defined as bread because of its high sugar content.
The ruling followed an appeal by Bookfinders Ltd, Subway’s Irish franchisee. The company had argued that the bread used in Subway sandwiches counted as a staple food and was consequently exempt from VAT.
However, as the court pointed out, Ireland’s Value-Added Tax Act of 1972 draws a distinction between staple foods – bread, tea, coffee, cocoa, milk and “preparations or extracts of meat or eggs” – and “more discretionary indulgences” such as ice-cream, chocolate, pastries, crisps, popcorn and roasted nuts.
The clincher was the act’s strict provision that the amount of sugar in bread “shall not exceed 2% of the weight of flour included in the dough”.
Subway’s bread, however, contains five times as much sugar. Or, as the supreme court put it: “In this case, there is no dispute that the bread supplied by Subway in its heated sandwiches has a sugar content of 10% of the weight of the flour included in the dough.”
The appeal arose from a claim by Bookfinder Ltd that there were owed a refund from January/February 2004 to November/December 2005, when they paid VAT at a composite rate of 9.2%. They argued that they should instead have been subjected to 0% VAT. But Mr Justice O’Donnell was not persuaded and the appeal was dismissed.
“The argument depends on the acceptance of the prior contention that the Subway heated sandwich contains ‘bread’ as defined, and therefore can be said to be food for the purposes of the second schedule rather than confectionery,” he ruled. “Since that argument has been rejected, this subsidiary argument must fail.”
Subway did not immediately respond to requests for comment.
The ruling is not the first slice of controversy for the brand. In 2014, Subway decided to start removing the flour whitening agent azodicarbonamide from its baked goods after a petition circulated online. The ingredient is commonly used in the manufacture of yoga mats and carpet underlay and has been banned by the European Union and Australia from use in food products.
The classification of certain food has long exercised the minds of retailers, lawyers and philosophers. In 1991, a VAT tribunal famously turned its attention to the vexed question of jaffa cakes, the sweet snacks that hover on what it termed “the borderline between cakes and biscuits”.
After noting, among other things, that the name was “a minor consideration”, the tribunal eventually accepted United Biscuits arguments’ and ruled that jaffa cakes had “enough characteristics of cakes to be accepted as such”, and they were therefore zero-rated.
There can also sometimes be a thin but important line between food and aphrodisiacs. In February this year, a top adviser at the EU’s highest court argued that a Dutch sex shop could not apply foodstuff VAT rates to the libido-stimulating pills it sold.
“These are consumed, not to provide the body with nutrients, but rather to stimulate sex drive, and thus, while they may affect certain bodily functions, they do not have a nutritional purpose,” wrote advocate general Maciej Szpunar.