In 1991, a British court had to determine whether a highly-popular, three-layer, round combination of Genoise sponge, orange-flavoured jam and chocolate, was a cake or a biscuit (or, as Americans might say, ‘cookie’). The judge’s decision was hugely important to both sides of the argument - the manufacturer, McVities, and the UK government - because it determined whether these ‘Jaffa Cakes’ would be subject to sales tax (then 17.5%; now 20%). Biscuits are taxable in Britain; cakes are not.
I have often been reminded of this now-famous case by comments about wine-based NoLos and RTDs. These are not, I am frequently reminded, ‘wine’.
Legal definition of cake
Let’s get back to the Jaffa Cakes
The eight main criteria for the case were
- The product's name
- The ingredients
- The texture
- The way the product behaves when stale
- A main composition of the finished product in terms of bulk and texture.
- Size
- Retail positioning
- Manner of consumption
Tellingly, when weighing up the arguments from both sides, the judge, Mr Donald Potter QC, decided that the product’s name was one of the least important factors: calling something a ‘cake’ did not make it a cake, any more than the popular UK candies called 'wine gums' have anything to do with fermented grape juice. Instead, he focused on the next four criteria on the list, all of which, he decided leaned more towards ‘cake-ness’ than the final three. Selling biscuit-sized Jaffa Cakes on the same shelf as various kinds of crunchy biscuits, and eating them with one’s fingers rather than a fork, were not enough to trump the role, and the hardness when stale, of the Genoise sponge. The verdict made the front page of most UK newspapers; perhaps there was not much going on that week.
Three decades later, if you were to ask the millions of Britons and shoppers in other countries whether the Jaffa Cakes in their basket are cakes or biscuits, how many would know the answer? My bet is that they’d mostly be in precisely the same situation Mr Potter was at the beginning of the case 34 years ago. Except that, unlike him, they really wouldn’t care.
We may not see legal cases about AF ‘wine’ and RTDs attracting this much interest beyond the world of wine professionals, but there are certainly financial and regulatory issues to be considered. Following my piece about the growth in sales of RTDs, I received an email from Stuart Spencer, Executive Director of the Lodi Wine Winegrape Commission in California.
In it, he referred to the “US 5010 Tax Credit that is allowing spirits producers to take advantage of the wine tax rates, and access to over 170,000 beer and wine establishments.” He also noted that “In 2023, nearly 60 million gallons of Canadian ‘wine’ was imported to the US at $1.07/gallon. There is" he said "a complete lack of transparency on these products, but some have suggested that they are basically a fermented sugar solution derived from cane sugar. And why aren’t they being produced in the US? Likely because they don’t meet the US definition of wine.”
Un-American wine
Of course, there’s another possible explanation: US-produced wine costs more. As Spencer wrote recently on the Lodi Growers website “The US Alcohol and Tobacco Tax and TRade Bureau (TTB) “permits wines labeled with an ‘American’ appellation to contain up to 25% foreign wine.” And lots of big wineries take full advantage of that rule, either with cheap Canadian or very similarly-priced Spanish bulk.
I sympathise with California winegrowers who leave their grapes unharvested while big wineries import a torrent of cheap wine from Europe and South America. And I sympathise with makers of RTDs that are genuinely wine-based if their competitors are covertly using spirits.
I’d love all these issues to be set straight, but, to be blunt, this is all a matter for US politicians, legislators and consumer groups who, from what I’m reading these days, may have a lot of other issues to address since the inauguration.
To return to the Jaffa Cakes, legal definitions, while vital to tax collectors, bureaucrats and their like, will always matter far less to consumers than the way they see the product. Today, I guarantee you, hosts in many countries are casually offering their friends a fluteful of ‘Champagne’ they've poured from a bottle clearly labeled as Cava or Prosecco. Or maybe, they’ll refer to all of these indiscriminately as ‘fizz’.
Similarly, they’ll pour ’soya milk’ or ‘oat milk’ into their coffee cups and non-alcoholic or mango-and-chilli flavoured red or white into their wineglasses. And, provided they enjoy the flavour of those beverages, they won't spend any time thinking about whether they're using the 'correct' description for them. And there's absolutely nothing any of us can do about it.
The views and opinions expressed in the Devil's Advocate pieces are those of the writer, and do not necessarily reflect the views or positions of the publication. They are intended to provoke discussion and debate. If you would like to offer your own response to this or any other article, please email the editor-in-chief, Anja Zimmer at zimmer@meininger.de.
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