Monday, October 29, 2018

Are Pringles potato chips?


I'm not all that familiar with the snack food Pringles. I've eaten them a few times and they seemed to be wonky tasting potato chips. For British taxing purposes, the question as to whether they were potato chips or something else altogether involved a lot of money. From the Mental Floss article The Question that Baffled Britain's High Court: Are Pringles Potato Chips?:
Are Pringles potato chips? From 2007 to 2009, that question plagued judges at three different levels of the British judiciary, leading to a series of head-scratchingly comical legal proceedings. The stakes, however, were nothing but serious: The ruling put hundreds of millions of dollars on the line.

The question revolved around Britain’s value-added tax, or VAT. According to the 1994 VAT Act, any product that is “wholly, or substantially wholly, made from the potato” was subject to a 17.5 percent tax. In 2007, Britain’s VAT and Duties Tribunal determined that Pringles fell under the tax’s umbrella—and demanded the chipman payeth.

Procter & Gamble, who owned Pringles at the time, vehemently disagreed. They argued that Pringles were only 42 percent potato flour, with the rest mostly a slurry of wheat starch, corn and rice flour, and vegetable oil. The snack food, they said, could not be classified as a potato chip because, unlike a real potato chip, its overall contents and shape were “not found in nature.”
The case ended up getting quite convoluted, with one court saying Pringles were more akin to cake or bread and later another deciding the did nit contain the required amount of "potatoness". With so much potential tax monies involved you can imagine  how long that sort of reasoning stood:
 After working itself in and out of semantic pretzels, the Court said the easiest solution to Chipgate was to appeal to a hypothetical child: If you asked an 8-year-old to explain what a Pringle was, what would he or she say? 
The question of a Pringle’s identity, the Court argued, “would probably be answered in a more relevant and sensible way by a child consumer than by a food scientist or a culinary pedant.” 
In other words, a chip is a chip is a chip—Pringles among them. With that, Procter & Gamble had to pay $160 million in taxes.
Seems odd that a hypothetical 8-year-old would settle the matter, but -- after all --- death and taxes.
 

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