A landmark ruling freeing Unilever's Knorr Vie Shots from the grip of the VAT man has been described by Innocent Drinks as a "nail in the coffin" for the hated 17.5% tax on liquids containing healthy foods.

Sir Stephen Oliver QC, who presided over a VAT hearing into Unilever's case, ruled that Knorr Vie Shots, made up of part-veg and part-fruit juice, did not constitute a beverage legally liable for VAT but a food that was zero-rated for the tax.

Innocent is campaigning to get its fruit smoothies exempt from VAT on the basis that they do not merely quench drinkers' thirst but also contain enough fruit to contribute to the government's 5-a-day agenda.

But Jamie Mitchell, marketing director, said the company would not be challenging HMRC at a VAT tribunal in the way Unilever had done.

The company would be concentrating instead on its political campaign for no VAT on healthy drinks.

"For us, it's definitely a much broader issue than managing to win a single argument that is going to impact on your business. Unilever has obviously got shareholders to deal with. For us, it's much more about the nation's health."

Fifty MPs have signed a motion calling for no VAT on fresh fruit juice.

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