Lucozade loses ‘functional food’ attempt

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Nick Huber
Freelance journalist
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The maker of Lucozade, the sports energy drink, has lost an attempt to prove that it is a “functional food” rather than a beverage, in a ruling that means that the product will be subject to VAT.

Lucozade was trying to prove that the drink is a functional food rather than a beverage, and therefore zero-rated for VAT under section eight to the Value Added Tax Act 1994. Most food is zero-rated for VAT.

However, in a ruling in September (GlaxoSmithKline v HMRC FTC/06/2011) the Tax and Chancery Upper Tribunal ruled that Lucozade Sport is mainly drunk for hydration and pleasure and should be classed as a beverage.

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