Innocent has lost a court battle over whether its flagship beverage was a drink for VAT purposes

Innocent has lost a court battle over whether its flagship beverage was a drink for VAT purposes

The co-founder of the UK's leading smoothie-maker, Innocent Drinks, has said it is "absurd" that smoothies should be subject to value added tax at the full rate.

The healthy drinks maker last week lost a court battle over whether its flagship smoothies should be counted as beverages for value added tax (VAT).

Innocent, which accounts for around two thirds of the UK smoothie market by volume, launched a legal bid to get VAT on smoothies removed due to the products' high fruit content. It likened its products to "a liquidised fruit salad".

However, in a ruling last week, Judge Barbara Mosedale rejected the firm's argument.

Innocent's co-founder, Richard Reed, said in a statement today (22 November): "This ruling is definitely not in the interest of the nation's health. It's absurd that smoothies, which contain two portions of fruit and help people live more healthily are subject to VAT at full rate when junk food like burgers, chips and doughnuts are sold tax free."

Value added tax is set to rise from 17.5% to 20% in the UK from January 2011. Earlier this year, Innocent sold a 30% stake in its business to The Coca-Cola Co.