Germany proposes 20% spirits tax increase
Germany plans to increase taxes on spirits, sparkling wine and alcopops by 20%, while beer and still wine remain unchanged under a proposed fiscal reform package.
GERMANY – Germany’s Finance Ministry has proposed a 20% increase in taxes on spirits from 2027 as part of a broader fiscal package aimed at raising revenue from alcohol and tobacco products.
The proposal, reported by health policy publication G+G of AOK, would increase the tax on pure alcohol from €13.03 per litre to €15.64, generating an estimated €400 million (US$455.84M) annually for the federal government.
According to the draft bill cited by Redaktionsnetzwerk Deutschland, the proposed increase would add just under €1 to the retail price of a standard 700ml bottle of vodka with 40% alcohol by volume.
The measure forms part of Finance Minister Lars Klingbeil’s plans to increase excise taxes on alcohol and tobacco, although the proposed rates are lower than those advocated by public health experts.
The proposal also includes a 20% tax increase on sparkling wine, Champagne, fortified liqueur wines and alcopops. However, beer taxes will remain unchanged, while still wine will continue to be exempt from taxation.
The proposed tax framework differs significantly from recommendations made by an expert commission appointed by Health Minister Nina Warken. The commission had recommended increasing alcohol taxes by more than 40% in 2027 before doubling them by 2029 to strengthen public health measures.
The distinction in taxation could have implications for Germany’s beverage sector by increasing retail prices for spirits and sparkling wines while leaving beer and still wine unaffected.
If implemented, importers, distributors, retailers, bars and restaurants dealing in premium spirits and sparkling wines could experience changes in pricing dynamics as higher taxes are passed on to consumers.
The debate over alcohol taxation has been driven largely by public health concerns. Physicians, addiction specialists and health insurers have argued for years that Germany’s alcohol prices remain relatively low compared with other European Union countries.
G+G cited official data from Destatis showing that alcoholic beverages in Germany are among the least expensive in the European Union.
Andreas Gassen, head of the National Association of Statutory Health Insurance Physicians, called for stronger tax increases. According to comments cited by G+G, he said tobacco and alcohol should become far more expensive to discourage young people from starting to use them. He has also proposed increasing cigarette prices to €20 (US$22.79) per pack.
Former German Health Minister Karl Lauterbach also supported higher taxes. In a post on X, he wrote that with smoking-related costs exceeding €100 billion (US$ annually, stronger measures would benefit both public health and the economy.
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