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Court Ruling on Sausage Could Change VAT in Europe

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SAUSAGE FACTORY
DailyFeed
In the coming days, weeks, and months, the European Union may face an influx of VAT (value added tax) refund claims which could prove seriously annoying for accountants and governments strapped for cash.

For all this we can thank one Manfred Bog, a delightful gnome whose metal wares are the envy of all blacksmiths in the kingdom a German sausage seller.

Bog recently won a ruling from the European Court of Justice in which he argued that his business shouldn’t have to charge the full rate of VAT. Bog claimed that his sausage required such little preparation that it could hardly be classified as “catering,” which apparently is subject to the VAT. The court agreed, and found that the same rules could apply to popcorn and nachos sold in German movie theaters.

The Telegraph reports:

Accountants said the decision could "open the floodgates" for VAT refund claims from operators of food stalls – such as at football matches and music festivals – as well as from cinemas.

Peter Ladanyi, director of VAT services at Chantrey Vellacott DFK, said: "The UK Government may have arguments to resist this case but it seems inevitable there will be huge claims made for VAT overcharged in the past and they will probably have to change the law."

The ruling is a rare reversal of how VAT usually trends in Europe. The tax, which is basically a sales tax that is levied at each stage of production and then billed to consumers at the time of purchase, has historically risen. Many EU nations started with low VATs, but have seen the rates climb to around 20%.

Ideally, supporters of VAT believe that the tax results in less government borrowing. But, this rarely happens. The WSJ points out that “from the 1980s through 2005, deficits were by and large higher in Europe than in the U.S. By 2005, debt averaged 50% of GDP in Europe, according to OECD data, compared to under 40% in the U.S.”

Moreover, the Journal reports that the efficiency of the VAT often results in greater public spending. In Europe, “average government spending was about 30.2% of GDP when VATs began to spread in the late 1960s. Today, those governments are more than 50% larger, with spending of 47.1% of GDP on average. By contrast, U.S. government spending (federal and state) rose to 35.3% from 28.3% as a share of GDP in the same period.”

While the recent court ruling on sausage may not render European nations financially insolvent, no one should underestimate the importance of meat consumption in Europe, especially Germany.

The fact is, Germans absolutely love sausage.

In 2006, Germans ate an average of 130 pounds of meat a year. In 2009, a study by Germany’s environmental agency found that 39% of German’s caloric intake was from meat, the highest in Europe. Plus, the nation boasts over 1200 varieties of sausage.

Peter Ladanyi, director of VAT services at Chantrey Vellacott DFK, told the Telegraph that he found the court’s decision to be “a strange judgment that will prove rather hard to implement. It appears that simple hot takeaway food products such as sausages will be potentially VAT-free whereas more complex food which needs more preparation will be vatable."

Now, I don’t know who was arguing before the court in favor of the sausage VAT, but clearly this person was clueless. While I’m no barrister, I believe I can offer one piece of evidence that would single-handedly dispel this myth that sausage is somehow so “easy” to make that it shouldn’t qualify as “catering.”

Ladies and gentlemen, I present Exhibit A: a sausage recipe.

Ingredients
• 4 pounds pork shoulder
• 1 pound pork fat
• 40 grams kosher salt
• 35 grams sugar
• 20 grams toasted fennel seeds
• 6 grams cracked black pepper
• 4 grams ground nutmeg
• 1 cup minced fresh parsley
• 1 head garlic, peeled and chopped
• ¾ cup dry sherry
• ¼ cup sherry vinegar

Special Equipment Needed for basic sausage

• Meat grinder with coarse and fine dies - either KitchenAid with grinder attachment, a stand-alone grinder, or an old fashioned hand-cranked meat grinder
Additional Equipment Needed for Stuffed Sausage Links
• Casings - hog casings
• Sausage stuffer
• Wooden rack to hang sausages to dry

Method
Making Bulk Sausage
1 Make sure your ingredients are laid out, and the meat and fat are very cold (fat can be completely frozen), before you begin (put meat and fat in freezer for 2 hours). Put bowls and grinder in freezer or refrigerator for an hour before using them.

2 Prepare a large bowl of ice and put a medium metal bowl on top of it. Slice your meat and fat into chunks between an inch and two inches across. Cut your fat a little smaller than your meat. To keep your ingredients cold, put your cut meat and fat into the bowl set into a larger bowl filled with ice.

3 When the meat and fat are cut, mix them quickly. Pour in most of your spices; I leave out a tablespoon or two of fennel seeds and a tablespoon of black pepper for later. Mix quickly. Add the salt and the sugar and mix one more time. Put into a covered container or top the bowl with plastic wrap and put the sausage mixture into the freezer for at least 30 minutes and no more than an hour. Now you can call back whoever might have bothered you when you started this process.

4 Meanwhile, mix ¼ cup of sherry vinegar and ¾ cup of dry sherry and put it in the fridge. I know sherry is not traditional in Italian sausage. You can use white wine and white wine vinegar if you’d rather (I save red wine and red wine vinegar for the hot sausages).

5 If you plan on stuffing your sausage, take out some of the casings (you need about 15-18 feet for a 5-pound batch of links) and immerse them in warm water. (If you are not planning on stuffing your sausage, you can skip this step.)

6 After your sausage mixture has chilled, remove your grinder from the freezer and set it up. I use the coarse die for Italian sausage, but you could use either. Do not use a very fine die, because to do this properly you typically need to grind the meat coarse first, then re-chill it, then grind again with the fine die. Besides, an Italian sausage is supposed to be rustic.

7 Push the sausage mixture though the grinder, working quickly. If you use the KitchenAid attachment, use it on level 4. Make sure the ground meat falls into a cold bowl. When all the meat is ground, put it back in the freezer and clean up the grinder and work area.

8 When you’ve cleaned up, take the mixture back out and add the remaining spices and the sherry-sherry vinegar mixture. Using the paddle attachment to a stand mixer (or a stout wooden spoon, or your VERY clean hands), mix the sausage well. With a stand mixer set on level 1, let this go for 90 seconds. It might take a little longer with the spoon or hands. You want the mixture to get a little sticky and begin to bind to itself – it is a lot like what happens when you knead bread.
When this is done, you have sausage. You are done if you are not making links. To cook, take a scoop and form into a ball with your hands. Flatten out a bit. Cook on medium low heat in a skillet for 5-10 minutes each side until browned and cooked through.

Additional Steps for Making Links

9 If you are making links, put the mixture back in the freezer and clean up again. Bring out your sausage stuffer, which should have been in the freezer or refrigerator. Run warm water through your sausage casings. This makes them easier to put on the stuffer tube and lets you know if there are any holes in the casings. Be sure to lay one edge of the flushed casings over the edge of the bowl of warm water they were in; this helps you grab them easily when you need them.

10 Slip a casing onto the stuffing tube (And yes, it is exactly like what you think it is). Leave a “tail” of at least 6 inches off the end of the tube: You need this to tie off later.

11 Take the meat from the freezer one last time and stuff it into the stuffer. If all the meat will not fit, keep it in a bowl over another bowl filled with ice, or in the fridge while you stuff in batches. Start cranking the stuffer down. Air should be the first thing that emerges – this is why you do not tie off the casing right off the bat.

12 When the meat starts to come out, use one hand to regulate how fast the casing slips off the tube; it’s a little tricky at first, but you will get the hang of it. Let the sausage come out in one long coil; you will make links later. Remember to leave 6-10 inches of “tail” at the other end of the casing. Sometimes one really long hog casing is all you need for a 5-pound batch. When the sausage is all in the casings, tie off the one end in a double knot. You could also use fine butcher’s twine.

13 With two hands, pinch off what will become two links. Work the links so they are pretty tight: You want any air bubbles to force their way to the edge of the sausage. Then spin the link you have between your fingers away from you several times. Repeat this process down the coil, only on this next link, spin it towards you several times. Continue this way, alternating, until you get to the end of the coil. Tie off the other end.

14 Almost done. Time to hang your sausages. Hang them on the rack so they don’t touch (too much), and find yourself a needle. Sterilize it by putting into a gas flame or somesuch, then look for air bubbles in the links. Prick them with the needle, and in most cases the casing will flatten itself against the link.
15 Let these dry for an hour or two, then put them in a large container in the fridge overnight, with paper towels underneath. Package them up or eat them the next day. They will keep for a week, but freeze those that will not be used by then.

That's easy?
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