High Court ruling finds Pringles are not potato crisps
Procter & Gamble, owner of the Pringles brand, have won a High Court ruling in the UK which establishes the Pringles products are not potato crisps (chips).
Procter & Gamble initiated an appeal following a VAT and Duties Tribunal decision in May that Pringles products were, in fact, potato crisps – therefore making them eligible for a 17.5% sales tax.
P&G’s successful appeal to the High Court was based on their belief that the product is more like a cake or biscuit due to the fact that it is cooked with baked dough.
In arguing the case Richard Cordara, QC, claimed that Pringles products are designed to be different to regular crisps. “The appearance and taste of a Pringle is not that of a potato crisp,” he suggested. “It has none of the irregularity and variety of shape that is always present in crisps.”
Justice Nicholas Warren agreed and cited the 42% potato content as being below the level at which VAT should apply.
In the UK most food is exempt from the Value Added Tax (VAT) but one product category not exempt includes ‘potato crisps, sticks and puffs’. Consequently, the Judge’s decision will lead to millions of pounds in savings for the global giant and, in further pain for Revenue and Customs, he ordered them to pay £100,000 in legal costs.
The saga may not be over, however, with Revenue and Customs contemplating an appeal.
One wonders if the decision will lead to retailers placing Pringles products alongside biscuit products instead of their customary place in many supermarkets and convenience stores amongst potato chip products.
