Maker of celeb anti-ageing potion made from fish scales loses £3.6m tax fight after claiming £50 drink is ‘food’

THE maker of a celebrity-endorsed anti-ageing potion using fish scales has lost a £3.6million fight with the taxman after claiming the £50 drink was “food”. London-based entrepreneur Tony Sanguinetti, 59, founded beauty company Minerva Research Labs Ltd in 2009 to produce collagen supplements made from waste sardine scales and cow hides after becoming “obsessed with finding a way to reverse the signs of ageing”. Businessman Tony Sanguinetti with Charlotte Hawkins, centre, and Dame Denise Lewis, who both endorse the collagen product Credit: Supplied by Champion News Mr Sanguinetti aruges his product should be regarded as a ‘food’ providing ‘healthy nutrition’ Credit: Supplied by Champion News The company now has a yearly turnover of around £16million and makes the best-selling collagen drink in the UK, Gold Collagen Pure. Its products are advertised and endorsed by stars including Yasmin Le Bon, TV presenter Charlotte Hawkins and former Olympic champion Dame Denise Lewis. Sign up for The Sun newsletter Thank you! In 2022, however, the company asked the taxman to hand back around £3.6m it had paid out since 2018, claiming that it had been classified in the wrong tax bracket and ought to have been “zero rated” for VAT. After HMRC refused the refund, the company took the case to a tax tribunal, arguing that the supplements ought to be regarded as a “food” providing “healthy nutrition” for tax purposes, rather than being more akin to a “medicine.” Gold Collagen Pure is the UK’s best-selling collagen drink Credit: Minervalabs.com Minerva Research Labs was set-up by Mr Sanguinetti in 2009 Credit: LinkedIn/@minerva-research-labs-ltd It argued the beauty drink provides customers with “the perfect blend of nutritional ingredients to act as a building block for great skin, great hair, functional joints and muscles”. But Judge Anne Redston, sitting in the tax chamber of the First-tier Tribunal, has now rejected Minerva’s bid to avoid the massive tax bill. Giving judgment, she said the products are not marketed to be taken as a meal or snack and that just because they “taste nice doesn’t mean that purchasers are buying them as a food.” “The sole issue for determination was whether the products were ‘food of a kind used for human consumption’ and so zero-rated,” she said. Most read in The Sun “Collagen is the most abundant protein in the human body, found in connective tissue, muscle and skin. “As we age, the amount of collagen reduces, so skin becomes thinner and less elastic, joints become less supple and hair becomes thinner. “All of the products contain either hydrolysed marine collagen or hydrolysed bovine collagen. “The marine collagen is produced from waste fish scales by a French company…The bovine collagen is produced from cow skin or hides by a German company. “The products are consistently held out as providing nourishment for bones, cartilage, muscles, joints, hair and skin. “Since the purpose of food is to provide nourishment for the body, we have found this to be a weighty factor supporting the appellant’s case. “There are however many factors on the other side of the scales. “Minerva usually refers to the quantity a person should consume every day as a ‘dose’, with occasional references to it as a ‘treatment’ and a ‘serving’. “The products are also held out for sale as liquid beauty supplements…and the reviews and social media posts concerning the products demonstrate that consumers purchase the products for their cosmetic and anti-ageing benefits. “The products are not marketed to be eaten instead of a meal, or even as a snack. Although they are sold via some outlets which also sell food, they are not positioned alongside food products. “A number of factors are indicative of a medicine rather than a food. In our judgment… the products are not ‘food for human consumption’.” The tribunal heard that Mr Sanguinetti, who grew up in Italy, founded Minerva in 2009 and “became slightly obsessed with finding a way to reverse the signs of ageing”. In the same year he travelled to Japan, where collagen drinks were on sale and began to research and test how to produce collagen-based drinks in Europe. Minerva’s first products were created in 2011, with the help of Japanese partners, and Gold Collagen Pure launched in the UK in June of that year. He told the tribunal that, anxious about getting his goods through customs and with no equivalent product in the UK, he accepted the customs code given to him and Minerva paid VAT at the standard rate. “Since then, Minerva has developed a range of products, all based on collagen,” said the judge. “Mr Sanguinetti described them as ‘perfect blend of nutritional ingredients to act as a building block for great skin, great hair, functional joints and muscles’. Gold Collagen Pure is now the best-selling collagen drink in the UK.” The case ended up before the tribunal after an HMRC inspector refused Minerva’s request to reclassify the products as food. The inspector had found the products were “predominately held out for sale as a health and beauty supplement” and that, despite having nutritional benefits, “are primarily taken by the consumer for their anti-ageing properties”. Backing HMRC’s stance, the judge said the products are sold as a “liquid beauty supplement,” adding, “We find as a fact, having considered all the evidence, that consumers purchase the products for their cosmetic and anti-ageing benefits. “Some of the outlets sell food as well as beauty products, but…we find that the outlets which also sell foods do not sell the products as part of the food sections of their stores or their websites. “The fact that the products are ‘food supplements’ indicates no more than that they are edible, have been added to food and must meet various regulatory requirements. “That does not help us answer the statutory question, namely whether what has been added to the food is itself ‘food of a kind used for human consumption’. “It is clear from our findings of fact that the products provide nourishment: they supply between 8 percent and 23 percent of a man’s daily protein requirement, and between 6 percent and 13 percent of a woman’s requirement, the source of protein being the collagen which forms the key ingredient of all the products. “The products also contain some carbohydrate, which gives energy, and… the vitamins and minerals supplied by the additional ingredients also have nutritional value.” She said the nourishment provided by the products is a key part of Minerva’s marketing and that its first products were born out of Mr Sanguinetti’s interest in “healthy nutrition.” “There is no dispute that collagen in the form of bone broth has been consumed for centuries and was thus ‘food of a kind used for human consumption’,” she continued. “However, that is not this case: the products are not the same as bone broth, but instead a condensed, processed form of hydrolysed collagen from fish scales and hides. “The fact that the products taste nice doesn’t mean that purchasers are buying them as a food. “The products are also held out for sale as liquid beauty supplements… Minerva was the official supplier of beauty supplements to London Fashion Week, and the reviews and social media posts concerning the products demonstrate that consumers purchase the products for their cosmetic and anti-ageing benefits. “The products are not marketed to be eaten instead of a meal, or even as a snack. Although they are sold via some outlets which also sell food, they are not positioned alongside food products. “A number of factors are indicative of a medicine rather than a food. “The amount which should be consumed is almost always described as a ‘dose’, and there are some references to ‘treatment’; both these terms are suggestive of medicine. “Some of the products are sold as ‘specially formulated’ for particular age groups, and all are marketed as ‘not suitable for under the age of 18’. “Although some foods, notably alcohol, are subject to age restrictions on sale, it is generally atypical for the sale of foods to be restricted in this way. “All the products are labelled with ‘precautions’ or ‘warnings’ so that customers are warned to consult their doctor if they are pregnant, breastfeeding or on medication. That too is not characteristic of foods. “We considered that the factors in the appellant’s favour were outweighed by those on the other side of the scales. “In our judgment, the outcome of the multi-factorial test is that the products are not ‘food for human consumption,’” the judge concluded. Comment now