I read this article with interest this today. “Irish court rules Subway bread is not bread” and it made me wonder why multinational companies are so keen on giving us food which is clearly bad for us.
How humilating for Subway to have your sandwiches not be actually bread. You’d think that Subway was a healthy choice if you had the option of going to other options like McDonald’s, KFC or Burger King. I thought it was the healthier option (although I have never visited much) since it’s a sandwich made of bread and they do tout their health credentials.
But it turns out that their “bread” contains 5 times the amount of sugar allowed in them to be considered “bread” and thus are subject to VAT. This is what the court in Ireland ruled on (read the article in the Guardian here). This is what it comes down to by the way – not over whether eating lots of sugar is bad for you (it is) or if Subway’s products are bad for you (possibly), but if they should be exempt from Value Added Tax – which in Ireland is 23%. Subway want to get away with paying less than their fair share in tax by any means possible
Now, I’ve been to Ireland and it’s quite frankly very expensive (but wages are higher) and I’m from Ireland but the high cost of living (HCOL) scares me from returning. Adding 23% onto the cost of a Subway sandwich that costs €3.99 (guessing) makes it €4.90 – an easy switch from not too bad to “almost a fiver!”
Subway are not the worst but it turns out that their food is not as good for you as you may think – and when you can’t even call it bread, you’ve got to wonder what you are really eating.
Subway is a franchise style organisation. This means that whilst there is central control of the Subway branding, merchandise, and production of food-style substances, the day to day operation of its stores/outlets is by franchise holders. They take responsibility for the profit and loss of each store and in exchange for franchise fees (£100k+) and a cut in revenue/profits they can do very nicely out of it. I’ve written before about franchises as a way to get rich and it’s sorely overlooked by the FI community.
Of course, the incentive of Subway is to make their food as cheap and as delicious as possible and sugar is a great way to do that. Keep the fat levels low and you can claim it’s “low-fat” but ramp up the sugar levels and you’ll get people coming back for more. Sugar is addictive doncha know? It’s been known about for a long time but you still see sugar added to loads of food.
The individual Subway store owners have no knowledge of what goes into the subs – and they care even less. They can tell you the 9 types of break like “just like mamma used to make – Italian farmhouse focaccia”, “Cincinnati sourdough-style cinnamon subs” and “100% natural good-time family bread-style subs” – of course I made these up but if it’s all just a mix of chemicals then you can call it anything and it can mean anything – that’s the beauty of marketing. Subway’s parent company spent $459m on marketing in 2019. What the hell? Do Americans really need to be reminded that they need to eat?
On a separate note, Subway seem to do a lot of marketing where we live – mostly in the form of discarded sandwich wrappers. Like any fast food, the waste is someone else’s problem and they don’t pay towards the clean-up. In my view, their should not just be VAT on Subway’s “bread” and calling their products “Value-added” is a misnomer. Instead there should be extra costs on their goods to both erode Subway’s profits and help pay for the damage that they cause and to discourage people from polluting their bodies.
Convenience food, which is what Subway sells, is often the best choice for those with limited time and options. It’s not good for us and we know that but it’s a trade-off. The problem is that we can’t always tell what’s good/better/best or bad/worse/worst and certainly the green Subway logo and “bread” that they sell has fooled people into thinking that they are a healthy option.
Removing sugar from our diet and getting better quality food which doesn’t come in unrecyclable and disposable wrappers is not only good for the planet but good for our health and for our wallet.