Ireland’s Supreme Court ruled this week that Subway sandwiches are more pastry than bread.
The nation’s highest court ruled on Tuesday that bread in the franchise’s sandwiches do not meet the legal definition of bread and are, therefore, subject to a value added tax of 13.5%. Ireland’s VAT Act of 1972 states that ingredients in bread such as sugar and fat should not exceed 2% of the weight of flour in the dough, the five-judge bench said. In Subway sandwiches, that weight hovers at 10%.
Video: Irish Court Says Subway Bread Is Too Sugary to Be Called ‘Bread’ (Food & Wine)
Irish Subway franchisee Bookfinders Ltd. appealed a decision by a lower court. The Supreme Court’s decision ends a 14-year-long court battle. “The argument depends on the acceptance of the prior contention that the Subway heated sandwich contains ‘bread’ as defined, and therefore can be said to be food for the purposes of the Second Schedule rather than confectionery,” the court ruled.
A spokeswoman for the U.S.-based franchise chain told MarketWatch: “Subway’s bread is, of course, bread. We have been baking fresh bread in our restaurants for more than three decades and our guests return each day for sandwiches made on bread that smells as good as it tastes.” The company is currently reviewing the tax ruling.
In 2014, Subway removed the flour-whitening agent azodicarbonamide or ADA from its bread after an online petition. The chemical is also used in yoga mats and 500 other items, including more than 130 brands of bread, stuffing, pre-made sandwiches and snacks, according to an analysis at the time by the Environmental Working Group, a nonprofit group focused on corporate accountability.
ADA generates tiny bubbles to make materials light, spongy and strong. “These materials show up in flip-flops, yoga mats and many types of foam packing and insulation,” it said. “In 1956, a New Jersey pharmaceutical and engineering firm discovered that ADA could be used as a “dough conditioner” to make bread that would rise higher, stay soft and resilient and form an attractive crust.”