Court of Appeal rules Pringles is a potato crisp

Procter & Gamble has lost a legal battle to prove its Pringles brand is not a potato crisp, in a failed bid to avoid paying an estimated 20m in VAT a year.

Procter & Gamble has lost a legal battle to prove its Pringles brand is not a potato crisp, in a failed bid to avoid paying an estimated £20m in VAT a year.

Despite protestations that Pringle is made out of 33% fat and flour and only 42% potato, the Court of Appeal has ruled in favour of HM Customs and Revenue.

Most food products are exempt from VAT, but potato snacks are one of the few exceptions.

A P&G spokesman says it does not owe any back taxes “as VAT has continued to be applied to the Pringles brand throughout the course of these considerations”. It is believed however that if it had not been paying the VAT, it could have been hit with a bill of £100m in back payments.

The spokesman says it is now “reviewing the decision and will consider our options for an appeal”.

The decision follows a ruling made last July by a High Court judge who found that Pringles’ packaging, unnatural shape and the fact that it contains less than 50% potato content, meant that it could be exempt from VAT.

But in the Court of Appeal Lord Justice Jacob says there is enough potato content “for it to be a reasonable view that it is made from potato”.

Speculation has surrounded P&G’s plans for Pringles in the past but the manufacturer has stated that the brand is one of its core products.

The brand has been extended in a bid to gain healthier credentials with the Pringles Rice Infusions offering.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here