Germany Plans to Raise Spirits Taxes by 20% Next Year

Germany’s finance ministry plans to raise taxes on spirits by 20% next year, a smaller increase than health experts had urged, according to a report cited Monday by the health policy publication G+G of AOK, one of the country’s largest public health insurers.

Under the draft bill described by Redaktionsnetzwerk Deutschland, the tax on pure alcohol would rise from €13.03 per liter to €15.64. That would add just under €1 to the retail price of a standard bottle of vodka at 40% alcohol by volume, the report said. The measure is expected to bring in about €400 million a year for the federal government.

The proposal is tied to a broader effort by Finance Minister Lars Klingbeil of the Social Democrats to increase taxes on alcohol and tobacco, though more moderately than some doctors, addiction specialists and health insurers have demanded. G+G reported that taxes on tobacco would also rise in stages.

The alcohol plan falls short of recommendations made by an expert commission appointed by Health Minister Nina Warken of the Christian Democrats. That panel had proposed an increase of more than 40% in 2027 and a doubling by 2029.

According to the report, the ministry also wants to raise taxes by 20% on sparkling wine, Champagne, fortified liqueur wines and alcopops. Beer taxes would remain unchanged, and wine would stay tax-free.

That distinction matters for Germany’s drinks business because it could raise shelf prices for spirits and sparkling wines while leaving beer and still wine untouched, a gap that may shift consumer demand and affect margins for retailers, bars and restaurants if the measure becomes law. Importers and distributors of premium spirits and sparkling wines could face particular pressure if higher taxes are passed through to consumers.

The debate has been driven in part by public health arguments. For years, physicians, addiction experts and health insurers have called for higher prices on alcohol and nicotine products, saying Germany remains cheap by European standards. G+G cited official data from Destatis showing that alcoholic beverages in Germany are still among the least expensive in the European Union.

Andreas Gassen, head of the National Association of Statutory Health Insurance Physicians, argued for a much steeper increase. In comments cited by G+G, he said tobacco and alcohol should become far more expensive to discourage young people from starting to use them. He has also called for cigarette prices to rise to €20 a pack.

Karl Lauterbach, a Social Democrat and former health minister, backed that position in a post on X, writing that with smoking-related costs exceeding €100 billion a year, stronger action would be better for both public health and the economy.

Carola Reimann, chair of the AOK federal association, said a stronger prevention strategy could lead to more healthy years of life, lower treatment costs and a more stable health system.

The draft described in the German reports has not yet matched those broader demands. For now, it points to a narrower fiscal change for 2027: higher taxes on spirits and several other alcoholic drinks, no change for beer, and continued tax exemption for wine.