Germany plans to more than triple shisha tobacco tax by 2030, industry warns of price doubling and black market spike

The tax proposal

Germany’s Federal Ministry of Finance has drawn up a bill that would increase the tobacco tax on waterpipe tobacco step by step until 2030. The current levy of about €56 per kilogram would climb to €188.46 per kilogram, almost a 3.4-fold rise. The first step, set for January 2027, already nearly doubles the tax, the draft shows.

The tax increases are disproportionate.

The average retail price sits at around €139 per kilogram. With the full tax increase, the industry association expects prices to reach €250–300 per kilogram, roughly doubling for consumers. A 200‑gram tin that now costs €25–30 would go up to roughly €60.

A history of black market problems

The waterpipe sector has already experienced what steep regulatory moves can trigger. Between 2022 and 2024, a restrictive packaging rule slashed the volume of taxed shisha tobacco, while imports of the specific charcoal used for waterpipes remained stable. The association estimates that 80 percent of shisha tobacco consumed in Germany during that period came from illegal channels. The legislator eventually rolled back the packaging rule, partly removing the ground from the black market.

The fiscal plans for hefty additional tax revenue would go wrong again. Instead, a loss of all legal tax revenue is to be expected; organised crime will profit.

Industry viability at risk

Association managing director Folke Rega warns that the tax plan could make legal production in Germany unviable. Meeting traceability and food‑quality requirements, posting financial securities, and maintaining documentation technology already costs a producer at least a quarter of a million euros per year. With demand expected to collapse after a tax‑driven price shock, he says manufacturers would simply close their businesses.

Consumer and health backdrop

An estimated 1.5 million people in Germany smoke waterpipes, according to a 2023 survey by Heinrich Heine University Düsseldorf (Debra study), representing 1.8 percent of the population aged 14 and older. About a quarter of the shisha tobacco sold in Germany is consumed in roughly 5,000 shisha bars, with the rest used privately. Around 2,500 points of sale, such as kiosks and petrol stations, and about 200 wholesalers supply the market. Cancer researchers stress the health risks of waterpipe smoking and point out that the belief that water acts as a filter is a widespread myth.