Gastronomy Revolution 2026: Less taxes, higher prices for you!

Gastronomy Revolution 2026: Less taxes, higher prices for you!

From January 1, 2026, the VAT rate on food in restaurants will be reduced from the current 19 to 7 percent. This was decided in the first coalition committee of the grand coalition in Berlin. Despite this reduction, those responsible in the catering industry do not expect prices for consumers to change significantly. The industry is heavily burdened by high costs, rising wages and energy prices as well as the after-effects of the corona pandemic.

Ingrid Hartges, general manager of the German Hotel and Restaurant Association (Dehoga), explained that companies primarily want to use the relief to promote employee loyalty, improve quality and make investments. According to Dehoga, around 40 percent of catering businesses are facing existential challenges. This difficult situation is compounded by the fact that the catering industry has seen tariff increases of around 30 percent as well as rising food and energy costs in recent years.

Economic challenges in the catering industry

Restaurateurs like Johannes Lohmeyer are skeptical about price reductions. He emphasizes that clients are unlikely to expect any savings from the reduction in VAT. A practical example is the Gasthof Thräna, which is run by Stefan Klennert in the third generation. Klennert took over the restaurant from his father in 2019, but had to remain closed during the corona pandemic. During this time, he invested in renovations, but was faced with sharply rising energy prices after the pandemic.

Klennert has long been calling for a reduction in VAT on food in order to reduce operating costs. Despite his efforts to keep prices low for his guests - for example by independently producing meat loaf, brawn and bratwurst - food prices continue to rise.

Uncertain future

The industry continues to struggle with unclear developments, particularly regarding the minimum wage. The problem can be clearly illustrated using an example from Schleswig-Holstein: A restaurant operator points out the new minimum wage of 15 euros, which causes additional costs. A survey by Dehoga shows that catering establishments spend around 70 percent of their sales on staff and the use of goods. It therefore remains to be seen how the industry will react to future challenges and to what extent the announced VAT reduction can actually bring relief.

The catering industry has experienced an extremely uncertain situation in recent years. The hope of relief through the reduction in VAT remains, but reality shows that many restaurateurs would primarily like to use the new regulation to stabilize their business rather than reduce prices for their customers.

For further information about the connections in the catering industry and the desired VAT reduction, see also the reports from Focus and MDR.