A Subway sandwich seen in Miami, Florida, in October 2015. Not related to the court case.
  • Ireland's Supreme Court has ruled that Subway's sandwich rolls are not legally bread due to their high sugar content.
  • The case was brought to the court by a franchisee holder in County Galway, which believed that the bread should be exempt from value-added tax (VAT).
  • But the VAT Act 1972 has a narrow definition of tax-exempt bread, saying the fat, sugar, and bread improver can't exceed 2% of the weight of the flour.
  • Sugar accounts for 10% of the weight of the flour in Subway's rolls, making them too sugary to be considered tax-exempt bread. 
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Subway sandwich rolls cannot be legally defined as bread in Ireland, the nation's Supreme Court recently ruled.

The case brought before the court was from Bookfinders Ltd., a Subway franchisee in County Galway, which believed that the rolls should be exempt from value-added tax (VAT). The judgement was delivered on Tuesday.

In Ireland, certain staple foods like bread are exempt from VAT. However, in order to differentiate between bread and baked goods, the VAT Act 1972 gives a definition of bread, saying that the fat, sugar, and bread improver should not account for more than 2% of the weight of the flour in the product. 

Subway's sandwich rolls don't meet this definition because the sugar accounts for 10% of the weight of the flour, the five judges wrote.

Subway did not immediately respond to Business Insider's request for comment on Thursday morning.

It's not the first time that the chain's bread has come under scrutiny. When reports in 2014 found that its bread contained a chemical also found in yoga mats, Subwat immediately changed the recipe.

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