Minerva Loses £3.6m VAT Battle Over Anti‑Ageing Drink
Minerva Research Labs, makers of the UK’s top‑selling collagen drink, lost a £3.6m VAT appeal after a tribunal judge ruled the products were not food but a health supplement. The decision means the company must pay the full tax bill and underscores the fine line between food and medicine in UK tax…
By Felo News Desk · Published
Minerva Research Labs Ltd, the London‑based company behind the best‑selling Gold Collagen Pure drink, has been ordered to pay a £3.6 million VAT bill after a judge ruled its collagen‑based beverages are not food but a health supplement. The ruling, delivered by Judge Anne Redston in the First‑tier Tribunal’s tax chamber, rejects the company’s claim that the drinks should be zero‑rated as food.
What Happened?
In 2022, Minerva sought a refund of the VAT it had paid on sales since 2018, arguing the products should be classified as food and therefore exempt from VAT. HM Revenue & Customs (HMRC) denied the request, and Minerva appealed to the tax tribunal. The tribunal’s decision, announced in September, confirms the company must honour the £3.6 million tax liability.
Background on Minerva and the Collagen Drink
Founder Tony Sanguinetti, 59, launched Minerva in 2009 after a personal obsession with reversing the signs of ageing. The company specialises in collagen supplements derived from cow hides and discarded sardine scales. Gold Collagen Pure, introduced in 2011, has become the UK’s top‑selling collagen drink, promoted by celebrities such as model Yasmin Le Bon, TV presenter Charlotte Hawkins and former Olympic champion Dame Denise Lewis.
Collagen is the most abundant protein in the human body, supporting skin, hair, joints and muscles. As people age, collagen levels fall, leading to thinner skin and joint stiffness. Minerva markets its drinks as a “perfect blend of nutritional ingredients” that act as a building block for healthy skin, hair, joints and muscles.
The Legal Argument
Minerva’s case hinged on the definition of “food of a kind used for human consumption.” The company argued that because the drinks provide nutritional benefits—protein, carbohydrates, vitamins and minerals—they should be treated as food and thus zero‑rated for VAT. The company also highlighted that the collagen source is similar to bone broth, a traditional food.
HMRC, however, classified the drinks as health and beauty supplements. The regulator noted that the products were marketed primarily for cosmetic and anti‑ageing benefits, not as a meal replacement or snack. The tribunal agreed, citing that the drinks are sold as liquid beauty supplements, described in marketing as a “dose” or “treatment,” and carry age restrictions and precautionary warnings typical of medicines rather than foods.
Judge’s Rationale
Judge Redston explained that the key question was whether the products were “food of a kind used for human consumption.” She found that while the drinks contain protein and other nutrients, they are not advertised as a meal or snack. The judge noted that the drinks are not positioned alongside food in retail outlets, and that consumers purchase them for cosmetic benefits rather than nourishment.
She also pointed out that the products are labeled with warnings such as “consult your doctor if you are pregnant, breastfeeding or on medication,” a feature uncommon in food products. These factors, she said, tipped the balance toward classifying the drinks as a health supplement rather than food.
Implications and Next Steps
With the tribunal’s decision, Minerva must pay the full £3.6 million VAT bill. The case highlights the regulatory challenges faced by companies that straddle the line between food and medicine. It also underscores the importance of clear product positioning and labeling in determining tax treatment.
Minerva’s appeal is now closed, and the company will need to reassess its marketing strategy and product classification. The ruling may prompt other firms in the health‑supplement space to review their own VAT status and ensure compliance with UK tax law.
Why This Matters
The decision clarifies how the UK tax system differentiates between food and health supplements, affecting companies that market products with dual nutritional and cosmetic claims. It also serves as a cautionary tale for businesses navigating the fine line between food and medicine in their product offerings.
Key facts
- Minerva loses £3.6m VAT appeal
- Drinks ruled as health supplements, not food
- Marketing and labeling influenced the decision
- Implications for other dual‑purpose products
- Companies must reassess product classification
Why it matters
The ruling sets a precedent for how the UK tax system treats products that blur the line between food and medicine, affecting the entire health‑supplement industry.
Frequently asked questions
What is the difference between food and a health supplement for VAT purposes?
Food is typically sold as a meal or snack and is zero‑rated for VAT. Health supplements are sold for specific health benefits and are taxed at the standard rate.
Can Minerva appeal the tribunal’s decision?
The decision is final; the company can only seek a judicial review, which is unlikely to succeed given the tribunal’s reasoning.
Will this affect other collagen drink brands?
Other brands may review their product classification and marketing to ensure compliance with VAT rules.
Sources
- [1] independent.co.uk — originally reported as “Company loses £3. 6m tax fight over ‘anti-ageing’ drink as judge rules it is not food”
