Subway’s bread isn’t bread, Irish court rules

BREAD used for sandwiches sold by the global fast food giant Subway is not bread at all, according to the Irish Supreme Court.

In fact, its sugar content is so high, the “bread” cannot even be classed as a staple food, judges have ruled.

The case stems from a row about whether the substance that envelops Subway fillings should be Vat-exempt.

Bread and other mainstays of a balanced diet are classed under Irish law as staple foods, and so have a VAT rate of zero. The law is supposed to differentiate bread from other baked goods such as pastry, which is not classed as a staple.

But with sugar content that is five times higher than the VAT exemption criteria, supreme court judges ruled that the American takeaway company should have to pay the tax.

“The argument depends on the acceptance of the prior contention that the Subway heated sandwich contains

It was found to contain a sugar content that was the equivalent to 10 per cent of the weight of the flour

‘bread’ as defined, and therefore can be said to be food for the purposes of the [law], rather than confectionery. Since that argument has been rejected, this subsidiary argument must fail,” the court ruled, dismissing Subway’s appeal against an earlier ruling in favour of the taxman.

The ruling covers all six types of bread served at Irish Subway outlets.

The 1972 VAT act states that the weight of ingredients such as sugar, fat and bread improver must not exceed 2 per cent of the weight of flour in the bread dough.

Subway’s bread was found to contain a sugar content that was the equivalent to 10 per cent of the weight of the flour.

The original case dated back to 2006, when the Office of Revenue Commissioners, Dublin’s equivalent of HMRC, declined to provide Subway with a VAT refund on taxes collected from early 2004 to late 2005. They had been charged 9.2 per cent, but argued that the rate should have been zero.

Following the ruling, the rolls are subject to tax at 13.5 per cent.

An Irish franchisee of Subway had lost appeals at both the High Court and Court of Appeals levels, before the Supreme Court agreed to hear the case.

Subway, which did not respond for comment when contacted by The Daily Telegraph, is no stranger to controversy when it comes to bread ingredients. In 2014, it agreed to remove the flour whitening agent azodicarbonamide after an online #Nowaysubway campaign.

Azodicarbonamide is outlawed for use in food in the EU and Australia, and is most commonly used to make yoga mats.