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Subway's sandwich bread isn't legally bread, Irish court rules

A franchisee of the U.S. food chain was hoping for a tax break, but Ireland's highest court ruled it was ineligible because the bread has too much sugar.

That's not bread that Subway has been using to make its sandwiches — at least not according to Ireland's highest court.

The republic's Supreme Court ruled Tuesday that because of their sugar content, Subway's loaves don't meet the legal standard for bread.

A subway sandwich.Joe Raedle / Getty Images

A case was brought by Bookfinders Ltd, an Irish franchisee of the U.S. company based in Galway, which argued that Subway's bread should be exempt from taxes because it is a "staple" food.

Instead, the five-judge court found that Subway's bread was a "confectionary or fancy baked good," as its sugar-to-flour ratio was nearly five times too high to fall within the legal standard of staple foods.

Under Ireland's Value-Added Tax Act of 1972, bread can't have a sugar content that exceeds 2 percent of its weight of flour in dough to be considered a staple food and therefore tax-free.

All of Subway's heated sandwich bread options — white bread, Italian, nine-grain wheat, honey oat, Italian herbs and cheese, nine-grain multiseed and hearty Italian — have sugar contents of 10 percent.

"There is no dispute that the bread supplied by Subway in its heated sandwiches has a sugar content of 10 percent of the weight of the flour included in the dough," the judgment read.

According to the Irish Independent, the case by Bookfinders stems from a 2006 decision in which the Office of Revenue Commissioners denied it refunds for value-added tax payments made from early 2004 to late 2005. Bookfinders claims that it shouldn't have been taxed and that it is entitled to a refund.

Subway pushed back against the ruling that its sandwiches were made of anything other than bread.

"Subway's bread is, of course, bread," a Subway spokesperson said in a statement. "We 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."

In nutritional information on the company's website, all of its bread contains at least 1 gram of sugar.

The company said it will be reviewing the ruling.