For those of you waiting with baited breath to hear the latest in the ongoing saga relating to what has now become known at the Pringles case, I can advise you that Procter and Gamble, the manufacturers of the eponymous potato snack, lost their appeal court case. As a result, they will be forced to pay tens of millions of pounds in VAT.
The Court of Appeal ruled in favour of the Revenue which had long maintained that Pringles were a potato snack and therefore liable for VAT.
Bizarrely, the High Court ruled last summer, (are you all keeping up) that the snack was in fact exempt from tax because effectively, it wasn’t a potato crisp. Principally, the reasoning was because of its “unnatural shape” and the fact that the potato content was less than 50%.
Even though the Appeal Court was presented with evidence that stated that potatoes made up only 42% of the ingredients of a Pringle, the judges felt that this was still sufficient to say that it was made from potato.
The end result of all of this is a tax bill for Procter and Gamble of as much as £100m and an ongoing liability of £20m per year.
The worrying thing I suppose from the consumers point of view is that if only 42% of a Pringle is potato, what’s the other 58% made of? Furthermore, are we going to see Procter and Gamble reduce the potato content by some artificial flavouring or other means so as to be able to go back to Court and argue successfully in the future.
All I can say on this is watch this space.