Punitive tariff on roasted coffee

The punitive tariff on roasted coffee was first introduced in Prussia by Frederick the Great. At that time, it was common practice to impose high duties on luxury goods from the colonies. However, as coffee became increasingly widespread and its import volumes exceeded those of an exclusive luxury product, Frederick took drastic measures: he simply banned the import of roasted coffee altogether.

During a transitional period, only raw coffee could be imported – albeit with high tariffs. Many people therefore roasted their own beans until even private coffee roasting was prohibited. From then on, the state-run roastery held the sole monopoly on roasted coffee.

As smuggling and illegal coffee roasting increased, resulting in significant tax revenue losses for the state, the ban was eventually lifted. Instead, the coffee tax was reintroduced. Today, it amounts to €2.19 per kilogram of coffee. Value-added tax (VAT) is added to this, making coffee a doubly taxed commodity in Germany to this day. Overall, coffee taxation brings the state approximately one billion euros annually.

Since roasting coffee accounts for a large share of the value chain, it is controversial that only raw coffee beans should be allowed to be imported duty-free. The mostly poorer coffee-growing countries, in particular, could benefit economically if they were allowed to roast and export their own beans.

A petition to abolish coffee tax and import duties was finally rejected by the Bundestag in 2013.