Germany raises taxes on cigarettes, sugary drinks and alcohol

Germany has enacted new taxes on cigarettes, sugary drinks, and alcohol, aimed at raising significant funds while promoting public health. The tobacco tax hike is projected to generate over €12 billion from 2027 to 2030, pushing the average pack price above €11 by the end of the decade. Meanwhile, a sugar tax on soft drinks, set to start in July 2027, will levy a €0.26 per liter fee on beverages containing at least 5 grams of sugar per 100 milliliters, with rates increasing for higher-sugar products.

The finance ministry anticipates this levy will collect €690 million in 2027 and €925 million in 2028, money that will help compensate for reductions in federal health insurance subsidies. Additionally, alcohol duties will see a 20% increase starting in 2027, generating hundreds of millions of euros. Meanwhile, beer and still wine remain unaffected.

Critics argue the tobacco tax is an extra strain on consumers and could encourage a black market, while other nations like Britain and France have implemented similar measures.