Subway’s Bread Is As Sweet As This Ireland Court Ruling

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Following a Subway lawsuit, the Ireland Supreme Court found that Subway’s bread isn’t legally “bread” due to the outrageous sugar content. Subway originally made the claim in 2006 that they deserved a refund for taxes they paid in 2004 and 2005 because the country’s Value-Added Tax (VAT) Act of 1972 which adds taxation to less healthy foods should not apply to them as they have “stable “and therefore they deserve massive refunds for taxes they had previously paid. Every courtroom prior to the Supreme Court, threw out their case; the company argued to the Supreme Court that Subway sells healthy “stable” food according to the law and should therefore be exempt from this tax as per the Value-Added Tax Act of 1972.

        After an Irish subway division, Bookfinders Ltd made their claim the courts were quick to point out that while their ingredients in the sandwich may qualify as “stable,” if they wanted tax-free bread they would have to astronomically drop its sugar content. This decision by the court might originally seem unjust as bread is bread right? The VAT Act says that for bread to be tax-free it must be healthy with sugar making up 0-2% of the dough’s weight or 1/75. On average, Subway’s bread has enough sugar to make up 10% of the bread’s weight, or 1/10! Subways six-inch bread contains 3 to 5 grams of sugar and the gluten-free version has 7 grams of sugar. Armed with this information the court proceeded to rule that Subway’s bread might be legally closer to a cake then it is to bread and denied them of their tax break.

         Subway heavily refuted this ruling having their spokesman state “We have been baking fresh bread in our stores for more than three decades and our guests return each day for sandwiches made on bread that smells as good as it tastes, Subway’s bread is, of course, bread”.

This is far from Subway’s first court incident about its food. In 2013, Subway was sued for false marketing stating their foot-long sandwich was not an actual foot long according to a well-known social media post. This case was thrown out as courts found it was “baseless”. In 2014, Subway faced mass pressure to remove azodicarbonamide, an addictive chemical found in yoga mats, from their bread.

Many have thought that Subway made this claim because of Apple’s major court victory in which they won the ruling not to pay 15 billion dollars in back taxes. Apple has its European division based in Ireland and according to a 2016 court ruling Ireland “handed out” illegal tax breaks. The European government claimed Apple used shell corporations (puppet companies) to take advantage of low tax rates in Ireland. The (2016) European court determined Apple owed 14.8 billion dollars to make up for taxes they paid from 2003-2014. Apple refuted this claim and in July 2020 won the case, proving they were not taking advantage of taxes or receiving unfair tax breaks. Many theorize that this is why subway made their claim now and why they feel justified in their approach.

         Subway, at the time of this article, is required to pay a 13.5% tax on their bread which added up can have a big effect on their business. The Supreme Court’s findings also helped expose the public to the fact that Subway isn’t as healthy as they might have thought and possibly leading to healthier food choices. Subway will undoubtedly try to appeal this decision but until their bread sugar content changes the court decision will stand strong.

Sources:

BBC

NPR