German smokers brace for 50% tobacco tax hike

The price of factory-produced cigarettes in Germany will rise sharply at the turn of the year after the German parliament gave the final approval on Friday for the government's tobacco tax reform.

After the Bundestag lower house passed the amendment to current legislation the previous day, the Bundesrat upper house cleared the way for hefty tax increases on cigarettes and other tobacco products between 2027 and 2030.

The higher taxes will be passed on to the end consumer, meaning prices will go up by some 50% or more in that time frame.

While a pack of 20 cigarettes in Germany currently costs a little over €8 ($9) on average, it will be nearly €12 by 2030, according to a forecast by the Ministry of Finance. Name-brand cigarettes could cost up to €14.

The government justified the legislative amendment with the necessary fiscal consolidation and health protection.

Each year around 130,000 people in Germany die from tobacco-related illnesses. Medical professionals and some politicians are hoping that the high financial cost of smoking will have a deterrent effect.

Almost one in five people, or 19%, smoke in Germany, according to a 2025 census, with 14% of people aged 15 or over saying they smoked regularly, and 5% occasionally.

"This is a good step in the right direction," said Katrin Schaller from the German Cancer Research Center (DKFZ). "However, the law is not ambitious enough because alternatives to cigarettes will remain too cheap in future, thereby encouraging people to switch rather than quit."

As examples, she mentioned fine-cut tobacco - used for rolling your own cigarettes - and cigarette-like cigarillos.

The tax hike is expected to funnel around €12 billion in extra revenue into the treasury's coffers within four years, although whether this will succeed remains in doubt.

The tobacco industry and the German Customs Union warn that, given the price increase, smokers could migrate to illegal channels and stock up on contraband cigarettes.

The fiscal plans are pipe dreams and a stimulus programme for organized crime, charged Jan Mücke from the tobacco industry association BVTE.

Thursday's vote in the Bundestag was supported by the vast majority of the ruling coalition of Chancellor Friedrich Merz's conservatives and the Social Democrats.