The recent decision by the Bundesrat to lower the value-added tax (VAT) on food served in restaurants to seven percent, effective January 1, 2026, has been met with mixed reactions across Germany’s gastronomy sector. While the move is undoubtedly a relief for many establishments, the question of whether this benefit will be passed on to consumers in the form of lower prices remains largely unanswered, particularly in cities like Munich.
A Lifeline for Businesses, Not Necessarily for Consumers
For restaurateurs, the VAT reduction from the standard 19 percent to seven percent is a welcome change, especially after years of navigating rising operational costs. However, a survey conducted by Dehoga (the German Hotel and Restaurant Association) reveals that only 51.6 percent of surveyed businesses plan to lower their prices. The majority intend to utilize the savings for crucial investments and to secure jobs, rather than offering immediate price reductions.
Maximilian Heisler, co-owner of the Giesing-based restaurant “Saletta,” exemplifies this nuanced approach. While he acknowledges the desire to pass on the benefits, a permanent price adjustment is not financially viable for his relatively new establishment. Instead, the “Saletta” is offering a unique voucher system: customers can purchase an 85-euro voucher that is worth 100 euros for food and drinks. This initiative, available until January 31, is designed to foster customer loyalty and provide a tangible benefit without permanent price cuts.
The Debate: Price Cuts vs. Stability
Daniel Tesic, owner of the vegan café “Omnomnom” in Neuhausen, argues that the VAT reduction is not intended for price decreases but rather to prevent further price increases. Tesic criticizes the undifferentiated public debate, which often fails to distinguish between large corporations and independent, owner-managed businesses. He emphasizes the significant role gastronomy plays in providing employment and the importance of fair wages for staff.
Tesic also points out the inconsistency in public perception: while the VAT reduction for dine-in meals is now a topic of discussion, delivery services have long benefited from the lower rate without public outcry. For him, the Bundesrat’s decision is “not a big hit, but rather a drop in the ocean – albeit a much-needed one.”
Stefan Grosse of the “Blauer Bock” restaurant in the city center shares a similar view. He does not plan to adjust prices in the coming year, stating that any potential savings are quickly absorbed by the continuous increase in personnel and energy costs. Susanne Allmang of “Steinheil” also confirms that her restaurant will not be adjusting prices, noting that she hasn’t implemented price increases in two years and the VAT reduction will help maintain this stability through 2026. She hopes the new regulation will help the gastronomy sector remain diverse.
Investing in the Future: Jobs and Quality
Thomas Geppert, State Managing Director of Dehoga, reiterated that the VAT reduction primarily serves to ensure the “existence” of gastronomic businesses, thereby contributing to the culinary diversity of cities like Munich. The Dehoga survey further supports this, indicating that 86.3 percent of respondents believe the new regulation will stabilize their economic situation, allowing them to invest and secure jobs rather than focusing on price reductions.
A Call for Quality and Less Complaining
Jürgen Wolfsgruber, a prominent restaurateur with the Michelin-starred “Sparkling Bistro,” offers a more critical perspective. While acknowledging the benefit of the VAT cut, he dismisses the notion of it being a panacea. Wolfsgruber plans to reduce the price of his six-course menu at “Sparkling Bistro” from 190 to 175 euros. However, at his other establishments, “Tschecherl” and “Obers,” price reductions are not planned, though customers might receive slightly larger portions for the same price. He has also adjusted staff salaries.
Wolfsgruber urges the industry to “complain less,” re-evaluate their recipes, and invest in quality. He criticizes some traditional taverns for increasingly serving convenience products while still charging high prices, believing that consumers are becoming more quality-conscious. For Wolfsgruber, the word “Gast” (guest) is central to gastronomy, and the focus should shift from mere numbers to providing a valuable experience.
He believes that the VAT reduction alone is insufficient to address the industry’s challenges and that some of the responsibility lies with the sector itself. Nevertheless, he emphasizes, “We were promised this – so it has to come now.”
Beyond VAT: The Wish List for the Industry
Beyond the VAT reduction, restaurateurs like Susanne Allmang are hoping for lower energy prices and less bureaucracy, including adjustments to working hour laws. Dehoga has also been advocating for a shift to weekly working hours for years. Geppert, despite these ongoing challenges, considers the recently approved VAT reduction one of their “greatest successes” and a welcome early Christmas present.
Back at the “Saletta,” approximately 30 people have already expressed interest in purchasing the discounted vouchers since Friday, likely as last-minute Christmas gifts. This suggests that while direct price cuts may not be widespread, innovative approaches to passing on benefits can still resonate with customers.
The VAT reduction presents a complex scenario for Munich’s gastronomy. It’s a much-needed financial boost, but its impact on consumer prices will be varied. The focus, for many, remains on long-term stability, investment, and job security, rather than immediate, across-the-board price decreases. The coming months will reveal how these strategies play out and what the true legacy of this tax cut will be for both businesses and diners in the Bavarian capital.
Source: https://www.sueddeutsche.de/muenchen/muenchen-gastronomie-mehrwertsteuersenkung-li.3341214
