Spending more bread on dough


By David Hejmanowski - Case Study



“There is no dispute that the bread supplied by Subway has a sugar content of 10% of the weight of the flour included in the dough, and thus exceeds the 2% specified.”

— Irish court

“Subway’s bread is, of course, bread. We have been baking fresh bread in our restaurants for more than three decades.”

— Subway

Every once in a while you see a headline about a court case or legal decision that is put in “clickbait” language that is clearly intended to get you to read the story much more than it is intended to actually convey any useful information to you. Such was the case with a recent Associated Press headline that blared, “Subway bread isn’t bread, Irish court says.”

Admittedly, I have never been to Ireland, but I’m fairly certain that Subway sandwich shops over there aren’t making footlongs out of cardboard or packing peanuts. And I’m equally sure that no Irish court had any direct reason to rule that bread isn’t bread, any more than it would have a reason to rule that milk isn’t milk, or honey isn’t honey.

These lawsuits over food labeling most often have to do with health and marketing regulations — laws intended to make sure that consumers understand what they are eating. Honey is a common example, actually, since the pure stuff you buy from the roadside beekeeper can be substantially different from the sugar-infused stuff you may get at a grocer.

The Irish case involving Subway sandwiches was actually not about labeling or food safety. It was, rather, about taxation. That’s because Ireland has a VAT — a “value added tax” that exempts certain foods. In order to qualify for the exemption, those foods have to be classified as a “staple.” And Irish law lays out strict qualifications for determining what foods qualify as a staple.

I don’t intend this column to be about taxes (that was last week), but in very, very simplistic terms, value added taxes, in use for about six decades in many countries around the world and in at least a couple of U.S. states, are taxes that are charged based on the incremental change in value at each stage of production. Most locations in the U.S. instead utilize a sales tax at the end stage of retail sale. But, again, that’s an overly simplistic explanation that addresses neither the benefits, nor drawbacks of the VAT system — there’s just not space here to do that.

In order for a bread product to qualify as a staple in the Irish system, it can’t have a sugar content higher than 2% of the weight of the flour in the dough. But Subway’s bread has five times that level, topping out at 10% sugar to the weight of flour. And because it exceeds the guideline, it’s not a staple. The court never said that it wasn’t bread, because that’s not the question the court was tasked to answer.

Now, as someone with a Celiac diagnosis who therefore can’t eat bread, I admittedly don’t know much about Subway’s sandwiches. (But I do know that Chelly Belly has an awesome gluten-free option that makes a great “Smoky” with bacon.) What’s certain, however, is that there were two major reasons why Subway was fighting this decision. First, the high sugar content in their bread isn’t great from a public relations standpoint because it might turn away people who are eating healthy. Second, it means that they’ll have to charge the VAT in Ireland, which will increase the price of their sandwiches and drive up competition pressure.

For their part, Subway issued a statement reminding people that their bread is obviously, “bread,” and continues to be made, fresh, in their stores every day. Unless they appeal the decision, however, Irish customers will be paying more dough for their bread.

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By David Hejmanowski

Case Study

David Hejmanowski is judge of the Probate/Juvenile Division of the Delaware County Court of Common Pleas, where he has served as magistrate, court administrator, and now judge, since 2003. He has written a weekly column on law and history for The Gazette since 2005.

David Hejmanowski is judge of the Probate/Juvenile Division of the Delaware County Court of Common Pleas, where he has served as magistrate, court administrator, and now judge, since 2003. He has written a weekly column on law and history for The Gazette since 2005.