Germany’s drinks trade group rejects planned tax increases on sparkling wine and spirits

Germany’s wine, sparkling wine and spirits trade group is pushing back against planned tax increases on sparkling wine and spirits, arguing that the measure could hurt demand, raise prices and weaken parts of the hospitality industry without delivering the revenue the federal government expects.

On Thursday, October 29, the Federal Association of Wine, Sparkling Wine and Spirits, known as BWS, said it rejects the proposed increase in alcohol and sparkling wine taxes that is being considered as part of the federal government’s effort to consolidate the 2027 budget.

The group’s position comes as the debate moves through Germany’s parliamentary process and as some regional governments signal resistance. According to BWS, the industry received support in the Bundesrat, the upper house representing Germany’s states, where Hesse and Rhineland-Palatinate were among those that spoke against the federal government’s tax plans.

BWS also pointed to a hearing on the 2027 budget-related legislation in the Bundestag’s budget committee, where doubts were raised about whether the expected additional tax revenue could actually be achieved at the level forecast by the government.

The association said higher excise taxes could push up consumer prices and reduce demand, offsetting part of the extra revenue the government hopes to collect. It warned that the effects would be felt across a sector made up largely of midsize companies, as well as in restaurants and bars and among consumers.

BWS said beverage-led hospitality businesses alone generate about €9.6 billion in annual sales and support roughly 225,000 jobs. It argued that new tax pressure could make investment more difficult for businesses that are already operating in a strained economic environment.

The dispute matters beyond the narrow tax debate because Germany is one of Europe’s key markets for alcoholic beverages. Any increase in taxes on sparkling wine and spirits could affect domestic producers, importers and hospitality operators that depend on sales in restaurants, bars and other drinking venues. The impact would likely be watched closely by companies across the drinks trade, including suppliers with exposure to the German market.

BWS also challenged the policy on public health grounds. The association said it sees no evidence that broad tax increases on specific product categories are an effective tool for reducing harmful alcohol consumption. Instead, it said it supports prevention efforts, youth protection measures and public education.

The group called for the planned tax increases to be removed as the legislation continues through parliament. Its comments add to pressure on the federal government as it tries to balance budget goals with concerns from state governments and affected industries about the broader economic cost of the proposal.

The latest intervention from BWS suggests the fight over the measure is likely to continue as lawmakers weigh whether higher levies on sparkling wine and spirits would strengthen public finances or place new strain on a drinks and hospitality sector that says it is already under pressure.