Germany Raises Taxes on Booze, Sugar, and Smokes

Germany is set to increase taxes on various products, including cigarettes, sugary drinks, and alcohol, in a move anticipated to bolster state finances and promote public health. As of October 16, 2026, lawmakers have approved substantial tobacco tax hikes, which are expected to generate more than €12 billion between 2027 and 2030. This measure aims to raise the average cigarette pack price to over €11 by the end of the decade.

The German cabinet also approved a sugar tax on soft drinks, effective from July 2027. Drinks with at least five grams of sugar per 100 milliliters will face a levy of €0.26 per liter, escalating to €0.32 for higher sugar content. This tax is projected to raise €690 million in 2027 and €925 million in 2028, with revenues earmarked to offset cuts in federal health insurance subsidies.

Additionally, duties on spirits, sparkling wine, and alcopops are slated for a 20% increase starting in 2027, with beer and still wine remaining untouched. These fiscal changes, mirroring international trends in taxing unhealthy products, are intended to steer consumer behavior while contributing hundreds of millions of euros to state coffers. Opposition parties have voiced concerns about increased consumer burdens and the potential for a rise in the black market.