In an interesting case, a British tax court ruled that Pringles are, in fact, not potato chips (or crisps as the British call them). Proctor and Gamble, the company behind Pringles fought for the ruling in order to avoid at 17.5% tax on “potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch”.
Ok, so what are Pringles made of? Only 42% of the product is made from potatoes. And what makes a potato chip a potato chip?--Apparently more than just being made from potatoes. According to the high court’s decision, shape and crispness must also be considered.
Aside from the, ahem, deep soul-searching questions about what actually makes a potato chip a potato chip, the interesting thing here is that Proctor and Gamble fought to essentially prove that their product is not a potato chip. Now I don’t know all of the details about Pringles’ sales internationally (will the tax savings in the UK off-set any decline due to the new “we are not a potato chip” revelation?) or whether consumers already didn’t view the chip crisp potato flavored circular snack as a potato chip, but I certainly hope P&G considered the potential brand erosion by fighting this case.
What do you think? Was this good business strategy, or did Pringles just take a step toward being stuck between the pork rinds and yellow zingers on the bottom left hand corner of your grocer’s shelf?
