Minerva Research Labs loses £3.6m tax battle over collagen drinks

Minerva Research Labs has lost a legal battle at the First-tier Tax Tribunal in London regarding a £3.6 million VAT dispute. The company, founded by entrepreneur Tony Sanguinetti in 2009, sought to recover the funds, arguing that its flagship product, Gold Collagen Pure, should have been zero-rated as food.

The collagen-based drink, which utilizes ingredients such as cow hide and sardine scales, is the top-selling product of its kind in the UK. Minerva argued the supplement provides nutritional building blocks for skin, hair, and joints, qualifying it as food for human consumption.

However, Tribunal judge Anne Redston rejected the claim, ruling that the product could not be classified as food for VAT exemption purposes. The judge noted that the products are not advertised to be consumed as meals or snacks, stating that “simply because they taste nice doesn't mean that purchasers are buying them as a food.” The company currently generates approximately £16 million in annual revenue.