Subway bread isn't bread, Irish court says

LONDON (AP) - Ireland's Supreme Court has ruled that bread sold by the fast food chain Subway contains so much sugar that it cannot be legally defined as bread.

The ruling came in a tax dispute brought by Bookfinders Ltd., an Irish Subway franchisee, which argued that some of its takeaway products - including teas, coffees and heated sandwiches - were not liable for value-added tax.

A panel of judges rejected the appeal Tuesday, ruling that the bread sold by Subway contains too much sugar to be categorized as a 'œstaple food,'ť which is not taxed.

'œThere is no dispute that the bread supplied by Subway in its heated sandwiches has a sugar content of 10% of the weight of the flour included in the dough, and thus exceeds the 2% specified,'ť the judgement read.

The law makes a distinction between 'œbread as a staple food'ť and other baked goods 'œwhich are, or approach, confectionery or fancy baked goods,'ť the judgement said.

Subway disagreed with the characterization in a statement.

'œSubway's bread is, of course, bread,'ť the company said in an email. 'œWe have been baking fresh bread in our restaurants for more than three decades and our guests return each day for sandwiches made on bread that smells as good as it tastes.'ť

Bookfinders was appealing a 2006 decision by authorities who refused to refund value-added tax payments. Lower courts had dismissed the case before it reached the Supreme Court.

Subway said it was reviewing the latest tax ruling. It added that the decision was based on an outdated bread exemption set by the Irish government that was updated in 2012.