money & economicsWikipedia1927–1991 · Britain

Jaffa Cakes were named after oranges, and a court ruled they are legally cakes

the gist

McVitie and Price first made Jaffa Cakes in 1927, naming them after Jaffa oranges, a popular British variety, to suggest sweetness and a Mediterranean origin. The jam is actually apricot, with tangerine oil. The name was never trademarked, so it became a generic term that other makers use. In 1991 the tax authorities argued that Jaffa Cakes were chocolate-covered biscuits and should be subject to VAT. A VAT tribunal ruled they were cakes, partly because cakes harden as they go stale while biscuits go soft. The company also produced a 12-inch version to argue that size did not matter.

so what

The case shows how tax law can hinge on definitions that seem absurd, since a biscuit or cake classification changes the price. The name also shows how a brand can become a generic word.

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