Germany approves gradual tobacco tax increases

The German Bundestag has passed legislation to gradually increase tobacco taxes, leading to a significant rise in cigarette prices over the coming years. Currently averaging just over eight euros per pack of 20, prices are projected to rise to approximately 11.36 euros by 2030, with premium brands potentially reaching up to 14 euros.

The tax hikes will also apply to rolling tobacco, cigarillos, hookah tobacco, and e-cigarette liquids. The German government anticipates generating approximately 12 billion euros in additional tax revenue over a four-year period, with annual contributions expected to grow from 1.5 billion euros in 2027 to 4.5 billion euros by 2030.

Proponents of the law, such as Ingo Fogel of the Social Democratic Party (SPD), state the measure aims to consolidate the budget and discourage nicotine consumption, particularly among youth. However, the tobacco industry has expressed concerns that high prices may drive consumers toward the black market or encourage cross-border shopping within the EU, potentially harming legal retailers and undermining fiscal goals.