LONDON -- Pringles are potato chips, a London court ruled today in a dispute over the salty Procter & Gamble Co. snack stacked in a tube.
A three-judge panel at the Court of Appeal threw out a lower courts ruling that for tax purposes the snack isn't a potato chip, stick or puff. The earlier ruling allowed Pringles to be sold without a sales duty.
While most food is exempt from Britain's 15 percent sales tax under British law, the U.K. tax office claimed Pringles are covered by an exception for products made from the potato, or from potato flour, or from potato starch.
P&Gs' lawyers argued Pringles don't look like a chip, don't feel like a chip and don't taste like a chip. They also claimed the snack isn't made like a chip since its cooked from baked dough, not potato slices. Justice Nicholas Warren in July agreed and ruled Pringles aren't made from the potato for the purposes of the tax exemption.
Justices John Mummery, Robin Jacob and Roger Toulson in today's ruling said it wasn't the lower court's job to look into scientific or technical questions about the composition of Pringles. A child would be able to give a more relevant and sensible answer than a food scientist, the judges said.
The court's decision could cost Cincinnati-based P&G as much as 20 million pounds ($31 million) a year, said the judgment, citing company lawyers.
-- Bloomberg News
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