Bad prospects for shisha bars: experts fear a wave of bankruptcies

Bad prospects for shisha bars: experts fear a wave of bankruptcies

According to a report from t-online.de, the shisha industry is threatened with a wave of bankruptcies this year. The introduction of a packaging regulation that prohibits the sale of shisha tobacco in large containers has led to sharply increased prices and a sharp decline in legal tobacco consumption. This in turn has led to an increase in the black market and a sharp decline in tax revenues, although consumption has remained stable.

The introduction of the packaging regulations was implemented in mid-2022 and has led to a doubling of prices for shisha tobacco. This has led many consumers to switch to illegal products that contain dangerous and uncontrolled ingredients. The amount of legally taxed tobacco is now only about a tenth of what it was in 2021, which has led to a significant drop in tax revenue.

The industry association is calling for a change to the regulation on packaging size in order to allow larger containers again and to curb the black market. This would not only stimulate legal business, but also lead to significant additional tax revenue that the state could put to good use in times of tight budgets.

This massive collapse in the legal shisha tobacco market and the sharp increase in the black market could have a significant impact on the industry. If the wave of bankruptcies occurs, numerous shisha bars would close and manufacturers and dealers of water pipe tobacco would have to file for bankruptcy. In addition, the state would lose significant tax revenue, which is urgently needed. It is therefore important that the federal government takes measures to stabilize the economic situation of the shisha industry.