Berlin. Germany's smokers have to prepare for significantly higher prices for cigarettes. This is due to an amendment to the law that provides for increasing tobacco taxes. The Finance Committee of the Bundestag will vote on this on Wednesday, and approval is considered very likely. On Thursday, the plenary session of the people's representatives is expected to give the green light. The Federal Council could lodge an objection on Friday, but that is considered virtually impossible.
According to the project, from 2027 onwards, taxes and therefore prices will gradually increase; in 2030 a pack of cigarettes could cost around four euros more than it currently does. The average pack price in summer was 8.05 euros. Based on the proposed law, an average price of 9.10 euros for a pack of 20 is forecast for the coming year. In 2028, after a further tax increase, it will be 9.91 euros, in 2029 it will be 10.81 euros and in 2030 it will finally be 11.78 euros. Branded cigarettes could cost up to 14 euros, but their price is currently less than 10 euros.
It becomes significantly more expensive for users of fine-cut cigarettes, i.e. hand-rolled cigarettes. “When classic cigarette packs become more expensive, many smokers switch to fine-cut cigarettes to save money,” says Michael von Foerster from the Association of the German Smoking Tobacco Industry (VdR).
Now fine-cutting is becoming much more expensive and the price difference to cigarette packs is narrowing. “As a result, many smokers will not switch from legal cigarettes to fine-cut cigarettes, but from legal cigarettes to illegal cigarettes - our legal companies lose customers and the tax authorities lose taxpayers, organized crime is the winner.”
A 30-gram pack of fine-cut cigarettes is currently available for 6 to 8 euros; it contains around twice as much tobacco as in a pre-made pack of 20 cigarettes. According to statistics, the weighted average retail selling price could rise from a good eight euros next year to more than 12 euros in 2030.
Cigars, cigarillos and water pipe tobacco are also becoming more expensive - but these products are not rising as steeply as was previously considered in the legislative process.
The federal government justifies the project with tight budgets - it is a necessary step to consolidate the budget. It also serves to protect public health. Last year the tax authorities collected 17.6 billion euros in tobacco taxes. In 2027, the tax increase will bring 1.5 billion euros more into the coffers than without the increase, according to the Federal Ministry of Finance. According to the forecast, the additional tax revenue will increase year after year; by 2030 it should be 4.5 billion euros.
However, the tobacco lobby has doubts about this forecast. The “hope item of additional income” will not become a reality, warns VdR association representative von Foerster. Jan Mücke from the Federal Association of the Tobacco Industry and Novel Products (BVTE) speaks of “completely unrealistic castles in the air”.
Many consumers will migrate to the black market and buy illegal cigarettes in backyards or shop in other EU countries, he says, pointing to a study by the consulting firm DIW Econ, which analyzed similar tax increases in other EU countries and concluded that there is also a risk of black market effects in Germany.
Cancer researchers are in favor of the tax increase - they hope that high prices will have a deterrent effect and that smokers will stop consuming cigarettes. “A tobacco tax increase is the most effective single measure to motivate people not to smoke,” says Katrin Schaller from the German Cancer Research Center (DKFZ). The tax increase does not necessarily mean that illegal trade will increase. The supply chains should be controlled and customs strengthened, says Schaller. “If you support this more, it should be manageable with the black market.”
The Green Party member of the Bundestag Johannes Wagner believes the tax increase is right, although too weak and “unambitious” - if it were even higher, more people would stop smoking. Wagner also complains that the government is not concerned with health protection, but rather with pure budget consolidation. “The government is tapping the tobacco tax to plug budget holes.”
The left-wing Bundestag member Doris Achelwilm, who sees people with low incomes as particularly affected, is also critical. “We are dealing with further downward pressure that will not save the budget and will hardly improve the health policy balance.”
