Law Weblog

A tea cake is a biscuit (April) now Pringles are not crisps

Sunday 6 July 2008 at 10:11 pm | In News | Post Comment

Procter & Gamble v HMRC [2008] ChD
[Statutory Interpretation – literal meaning – reasonable man in the street approach]
D, Her Majesty’s Revenue and Customs (HMCR) imposed VAT on “Pringles” made by C. HMCR put Pringles in the category of “potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch” as contained in the VAT Act 1994. As a result, C was liable to pay 17.5% VAT.

Held: Mr Justice Warren:
Pringles are not potato crisps because they are not made wholly or exclusively from potato, the potato content is less than 50%, they are also made from dough. Also distinguishing them from crisps is their packaging, and “unnatural shape”. What Pringles are ‘made from’ was a question of law; which is found by combining two issues of fact; were they made of mostly of potato, in a way other crisps are made.
Regular Pringles are not potato crisps applying these tests.

Following the judgment, Pringles, in all flavours are free from Value Added Tax (VAT).
Because they are manufactured from dough, “Pringles” are more like a cake or a biscuit.
Warren J did not confine his interpretation of the statute to single test – for example the literal rule – but also applied EC policy. In addition, he went on to say,

“… the reasonable man in the street is not to be removed from the scene by some judicially imposed detention-without-charge. Once he has understood the context in which he is to form a view, the question of similarity is for him.”

C won