Irish Supreme Court says metro bread cannot legally be called bread under tax law


A worker wears a face mask while making a sandwich at a Subway store on June 12, 2020 in London, England.

A worker wears a face mask while making a sandwich at a Subway store on June 12, 2020 in London, England.
Photo: Peter Summers (Getty Images)

The Supreme Court of Ireland ruled that bread from international fast food chain Subway cannot legally be called bread under Irish tax law. The problem? Subway bread simply has too much sugar and should be considered “confectionery”.

The decision, first reported by Ireland Independent and available online from the Supreme Court of the Republic of Ireland website, was delivered on Tuesday and is an incredibly dense read. The court noted that Subway bread has a sugar content of about 10% by weight of the flour. The amount of sugar in the dough would have to be 2% of the weight of the flour to be considered “bread” under Irish tax law.

The case made its way to the Supreme Court because the Irish franchisee of Subway, a company called Bookfinders, was trying to argue that it shouldn’t have to pay the Irish National Sales Tax, known as ” value added tax ”(VAT) in Europe. Staple foods like bread and milk are tax exempt, but non-essential foods that have been prepared, as well as anything considered “discretionary indulgences,” as the court ruling said, are taxed. That would mean things like ice cream and potato chips are taxed under the law as it’s currently drafted, but he left open the question of whether a subway sandwich was an indulgence.

The 51-page document posted online explains the rather long history of the case, which revolves around the wording of the 1972 Act which defines food and beverages subject to Irish value added tax of 13.5 %. Aside from exc including commodities, the tax only applies to food and drink consumed locally from restaurants, which only accounts for around 20-30% of Subway’s sales in Ireland. If you took the food home to eat, the tax would not be applied.

There was also a dispute over whether hot and cold food should be treated differently, meaning that a cold sandwich would not be taxed and a heated meatball sub would be taxed. Hot drinks like coffee and tea are specifically exempt from the tax, but there was some question whether this applied to buying a dry tea bag versus someone at a restaurant who gives you a hot cup of tea. The ruling devotes several pages to what Irish lawmakers heard when they wrote the words ‘hot drinks’ and ‘food and drink’ over 40 years ago. It gets complicated very quickly. In the end, the court concluded that cold sandwiches were technically exempt from the law.

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But in the end, the case really seemed to hinge on what this 1972 law defined as “bread”. The Subway franchisee argued that the focus should be on whether a sandwich qualifies as basic “Food and Drink” more broadly under the law, which would grant it an exemption, while the Revenue Commissioners of Ireland argued that courts should further define these products.

The original law of 1972 defines bread as containing:

fat, sugar and bread improver, provided that the weight of any ingredient specified in the sub-clause does not exceed 2 percent of the weight of flour included in the dough

The ruling noted that it seems fairly clear that anything added to the product that exceeds 2% of the weight of the flour would not be considered “bread” for VAT purposes.

Extract from the Irish Supreme Court judgment:

However, it is not necessary to consider whether this is what is contemplated by the law when it refers to the provision of food and drink, including food and drink that has been heated. and so on, because the argument depends on accepting the earlier claim that the Subway Heated Sandwich contains “bread” as defined, and therefore can be considered food for the purposes of Schedule 2 rather than confectionery . This argument having been rejected, this alternative argument must fail.

For the record, I can say that my wife, who is from Australia, was horrified to see our selection of sliced ​​breads when she moved to the United States. Pretty much every loaf in our local grocery store had a lot of sugar, something which I never really thought about, having always lived with the American food system.

To take just one example of a product we were purchasing, oA slice of Arnold 100% Natural Whole Wheat Bread contains four grams sugar. The packaging of the bread says “no additional nonsense”, but there is no regulatory meaning of the word “nonsense” under US law. To make bread, you need flour, salt, baking powder and sugar. How much of each ingredient a baker uses is entirely up to the manufacturer, and you can still get away with suggesting that a product like this contains no “added” ingredients like sugar, at least in the United States.

Compare that single slice of Arnold’s bread, containing four grams of sugar, to an Almond Joy “fun-sized” chocolate bar, which has eight grams sugar. Once you’ve eaten two slices of Arnold’s bread, you’ve basically eaten a fun candy bar. And it’s not just bread. American food and drink products like fruit juices are known for their sugar content. As we reported in 2014, a small 10-ounce bottle of Green Machine Naked’s drink has 35 grams of sugar. If you compare that for 10 ounces of Pepsi, which is owned by the same company, the soda has 34 grams of sugar.

Granted, it’s not just the United States that has super sweet bread. Swedish bread also contains up to 10% sugar, according to a study by 2018. But it’s sometimes a shock to Americans to learn that much of the rest of the world doesn’t essentially have to consume products with tons of sugar just because those sweeteners sneak into seemingly harmless products.

Speaking for myself, I have spent many years with no idea how much sugar is in everyday products like bread and that other countries have different health standards. And I’m sure a lot of other Americans had no idea too.


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