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The economics of bulk buying - Sally's Journal
March 19th, 2006
01:31 am

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The economics of bulk buying

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From:gerald_duck
Date:March 19th, 2006 11:28 am (UTC)
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I do the cash-and-carry thing at Booker once a month. That way, things get really convoluted.

Jaffa Cakes, for example, can be bought as cartons containing fifteen tubes of twelve, or cartons containing twelve boxes of fifteen. Or sometimes as cartons containing six double-packs of thirty. Occasionally, they also sell discounted cartons where the individual packs have an RRP printed on them. Then there are also the catering boxes of three-Jaffa-Cake portion packs. And even then, Tesco might charge less per pack when they're bought singly — though in making the comparison you have to remember Jaffa Cakes are VAT-exempt because they're legally biscuits despite being called cakes, and biscuits are VAT-exempt even though water isn't. Oh, and the catering and domestic supplies of Jaffa Cakes are in different parts of the huge cash-and-carry warehouse.

Still, it breaks the ice at parties.
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From:the_marquis
Date:March 19th, 2006 12:02 pm (UTC)
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Mmmmm jaffa cakes.
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From:samholloway
Date:March 19th, 2006 06:37 pm (UTC)
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Not quite; it's the other way round. Plain biscuits are VAT exempt. Cakes are VAT exempt. But chocolate biscuits aren't; they are classed as "luxury items" and hence attract VAT at the standard rate.

McVities argued in 1991 that Jaffa Cakes were cakes and not chocolate biscuits, and they won. Hence Jaffa Cakes remain VAT free.
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