The Daily Spud

...there's both eatin' and drinkin' in it

Have Your Cake And Tax It

To be fair, it’s not the first time that brioche has been called cake.

That famous quip attributed to the ill-fated Marie Antoinette, “qu’ils mangent de la brioche,” is most often translated to great dramatic effect as “let them eat cake.”

Brioche

Brioche - is it bread or is it cake?

(image from Flickr member Arnold Inuyaki licensed under Creative Commons)

It seems that the Revenue Commissioners, in what they are calling a ‘clarification’ of the current VAT rules, have decided that brioche might as well be cake, because it will now attract VAT, as cakes do, at 13.5%, whereas previously it would have been classified along with bread, which escapes the VAT net. And it’s not just brioche: other items, such as croissants, bagels and even garlic bread are no longer sufficiently bread-like to qualify for zero VAT status. Really.

Irish Food And Drink Industry Awards 2011

This came to my attention as I was leaving the hallowed halls of Trinity College, which had been the venue for the Bord Bia Irish Food & Drink Industry Awards last week. I happened upon Suzanne Campbell, who was discussing the issue and how it would hit small bakery businesses, with William Despard of the Bretzel Bakery (he who had made such an impression at the recent Savour Kilkenny Foodcamp). William was understandably exercised about the VAT hike.

In the midst of the discussion, the Minister for Agriculture, Food and the Marine, Simon Coveney, who had been speaking earlier at the event, came walking past. “Now that’s who you need to talk to,” said Suzanne. William wasted no time in letting his opinions be known, but the Minister, it seems, was already on the case. After a brief exchange, Minister Coveney passed on his way and you felt that the will, at least, was there to make this particular problem go away. Only time, of course, would tell.

It was a stark reminder of the challenges that food producers, especially those operating on a small scale, contend with all the time. The evening as a whole, however, had been one of positivity. Achievements in innovation, export performance, sustainability, domestic success, entrepreneurship and branding by companies, some large and some small, were all acknowledged on the night. It was a pleasure to see a list of winners which included Flahavan’s, who received the award for domestic success, Natasha’s Living Foods whose kale crunchies merited the innovation award, while Largo Foods, home of that über-Irish brand Tayto crisps, were acknowledged for their excellence in branding. All play a part in the good news story that is the Irish food and drink industry.

As the text on the back of the evening’s menu had indicated, Ireland will export almost €9 billion worth of food and drink to over 170 countries in 2011, which is an increase of 25% in what have been two of the most difficult years in our country’s finances. Austerity bedamned, this was something positive to tweet about:

BBAwards tweet

It only occurred to me later that I might equally have revised that aforementioned French phrase of old and proclaimed – in a far more practical and positive sense than the original – “Let us eat Irish food.”

12 Comments

  1. Interesting to really consider how a seemingly small decision like this has such a big impact. It’s a bit like our ‘what came first, the chicken or the egg’. What is a brioche anyway?, type of thing. 13.5% is a notable hike so something worth discussion I’m sure.

  2. I know Toni, it is quite a hike and there are always several sides to consider. I don’t envy the taxmen or the politicians who have to (attempt to) strike some kind of reasonable balance.

  3. So, like, does this mean a good old fashioned brack is susceptible to the VAT hike? Another good reason to eat ones own bread. Now if only we could buy flour actually produced in Ireland!

  4. Indeed so, Móna – if brack doesn’t already attract VAT, then it’s certainly likely to under the newly clarified rules, where, for VAT purposes, bread can only contain certain ingredients (cereal flour, yeast, salt, malt extract, milk, water, gluten, fat, sugar (or honey), bread improver and dried fruit) and also where fat, sugar and bread improver do not, individually, exceed 2% of the weight (there’s a slightly more generous 10% allowance for dried fruit). As for sourcing flour produced in Ireland, that’s a whole other day’s work!

  5. I think brioche would be classified as a luxury food product as it is enriched with butter and eggs.that could be the reason.

  6. Whether you consider it luxury or not, it is indeed the additional butter and eggs that would cause brioche to be considered sufficiently unbreadlike in this instance Alan. The Revenue Commissioners have pared back the definition of bread (for tax purposes) to one which allows for very little enrichment of any kind.

  7. Gosh, as someone who works in the food industry on a part-time basis (and who is thinking of making the jump into working there full-time *makes scared face*), the situation in Ireland at the moment is a complicated one. There’s the fact that Irish food seems to be making more and more of an impact on the international market and we seem to be developing more of an understanding of quality at home but there are all sorts of economic challenges and sometimes stupid rules and regulations at official level to deal with too.

  8. It is a complicated situation Sharon – I think if you spend any time talking to those involved in the food industry, you’ll find that out pretty quickly. If you do make the jump to working full-time in food, I wish you the very best of luck and I hope those complications don’t get the better of you!

  9. Garlic bread is a cake? Main course and dessert in one so.

  10. Daily Spud

    Friday, December 2, 2011 at 2:01 pm

    I like how you’re thinking, Gracie!

  11. Very interesting article Spud. I came here for a soup recipe but have been happily distracted with your tales on the raising of some bread’s status and taxability. It conjures up pictures of board meetings in the Revenue Commissioners where the said Commissioners are sitting around a large conference table piled high with various versions of bread and cake, scientifically measuring the butter and sugar, while swilling down the lot with a burco boiler of tea – tough business lunch!

  12. Daily Spud

    Sunday, December 4, 2011 at 3:06 pm

    So, not so much bean counters as bread counters in that case Ange!

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