In U.K. tax decision, chips fall in favor of Pringles

The High Court in London ruled on July 4 that Pringles are not potato chips, or crisps, and should not be subject to Britain's 17.5 percent value added tax. 

Procter & Gamble, the maker of the snack, filed a claim with the VAT tribunal in May pointing out that Pringles are made up of only 42 percent potato flour. Other key ingredients include corn flour, wheat starch and rice flour.

After an exhaustive inquiry into the ingredients, manufacturer and packaging, the judge said Pringles were not 'made from potato' within the definition laid down by the 1994 VAT Act, said a July 5 article in The Scotsman. Justice Nicholas Warren said that to fall within the exception, a product 'must be wholly, or substantially wholly, made from the potato.' 

Procter & Gamble sells an estimated 500 million pounds ($984 million) of Pringles in the United Kingdom each year, the newspaper said.

U.K. Revenue & Customs said it will review the court's decision and consider whether to file an appeal. 

Source: American Shipper