German restaurant VAT reduction fails to lower consumer prices

A study by the Food, Beverage and Catering Union (NGG) and wmp consult indicates that the reduction of Value Added Tax (VAT) on restaurant meals from 19 percent to 7 percent has not resulted in lower prices for consumers. After analyzing 180,000 dishes across more than 12,000 restaurants, researchers found that prices for 90 percent of items remained unchanged, while 8 percent actually increased. On average, prices rose by 0.5 percent.

Industry experts suggest that restaurateurs are using the tax savings to offset significantly higher operating costs, including energy, insurance, rent, logistics, and rising minimum wages. Dr. Marcel Klinge of the Future of the Gastronomy World (DZG) noted that the sector is economically and mentally exhausted, with approximately 2,600 businesses closing annually on a net basis. The decline is particularly notable in beverage-focused establishments like bars, clubs, and cafes, which have seen a 20 percent decrease in numbers since 2015.