Denmark to halve confectionery, coffee taxes in 2026 ahead of complete abolition
The abolition could save consumers and businesses a combined US$376 million in annual costs.
DENMARK – Denmark is set to halve long-standing taxes on confectionery and coffee in 2026, with a complete abolition scheduled for 2027.
The move, part of the proposed Finance Act for 2026, aims to ease consumer costs at a time when food prices in the country remain among the highest in the European Union.
The tax cut will apply to products containing cocoa, such as chocolate bars, cakes, chewing gum, sugary cereals, licorice, and other sweets.
With the confectionery tax in place for more than a century, its elimination marks the most considerable grocery-related tax relief Denmark has introduced in over a decade.
According to the government’s estimates, the abolition could save consumers and businesses a combined DKr2.4 billion (US$376 million) in annual costs.
Deputy Prime Minister and Liberal Party chairman Troels Lund Poulsen said the measure was designed to deliver immediate relief.
“By removing the two taxes, we achieve two things: We make it cheaper to be a Dane, and we also make it easier to run a business because we remove a lot of hassle and bureaucracy,” he said.
He added that the initiative should be viewed alongside broader personal tax cuts, referring to it as “the largest tax cuts on groceries in ten years.”
The coffee levy, in place since 1930, will also be halved in 2026 before being completely removed a year later.
The Danish Tax Ministry estimates that the price of 500 grams of coffee could fall by about six percent once the tax is lifted. Currently, coffee and confectionery taxes stand at roughly 25%.
Coffee holds a cultural place in Danish life, with people drinking an average of three cups a day. Yet prices have climbed steeply in recent years.
Venstre, Denmark’s Liberal Party, reported that since 2020, supermarket coffee prices have risen by 47%, while chocolate prices have increased by 40%.
Officials argue that eliminating the taxes will cushion households already facing higher global prices for coffee beans and cocoa, driven by supply shortages and extreme weather in producing countries.
The proposal will be formally introduced in parliament next week. Given the coalition’s majority, led by the Venstre Party with support from the Social Democrats and Moderates, the measure is expected to pass.
If approved, Danish consumers could see the first price cuts from 2026.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
