Story: The German Fleet Tax | Gerardos Column
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Austria abolishes it - Germany holds firm
Since April 1, 2005, the sparkling wine tax has been history in Austria. In Germany, however, this tax has continued to exist for over 100 years - without any visible intention of reform. The so-called sparkling wine tax, which was originally introduced as a luxury or envy tax, is a prime example of the longevity of taxes once they have been levied. In Germany, too, there would be plenty of arguments for abolishing or at least revising it, as our neighboring country has done.

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Promoting domestic production - an Austrian approach
In Austria, sparkling wine production with domestic wines plays an important role. The abolition of the tax served to improve the competitive conditions for domestic producers. The “Prosecco frizzante”, which is considered a sparkling wine and does not pay sparkling wine tax, is particularly popular there - because it is technically less “sparkling”. Unlike in Germany, Austrian sparkling wine is based almost exclusively on regional grapes. The measure was therefore also a deliberate economic policy decision in favor of the Austrian wine industry.

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Germany: Sparkling wine with foreign roots
The situation is very different in Germany. According to estimates, around 75 to 80 percent of the base wines for sparkling wine production are imported, mainly from the EU. Domestic winegrowers hardly benefit from this. Abolishing the tax would therefore mainly strengthen foreign producers - at least that is the counter-argument often put forward. Nevertheless, the question arises as to why a historically outdated tax that has long since lost its actual purpose remains in place.

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A tax with imperial roots
The origins of the sparkling wine tax date back to 1902, when Kaiser Wilhelm II introduced it to finance the imperial navy. The fleet has long since disappeared - but the tax has survived. The introduction was based on the increasing popularity of sparkling wine and champagne, which were considered luxurious fashionable drinks. At the time, the tax was seen as fair compensation for an elitist pleasure. At peak times, it accounted for up to 55% of the value of goods and led to a sharp increase in cheap mass products.

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What exactly is taxed?
It is not the wine itself that is taxed, but the carbon dioxide contained in the sparkling wine. According to the law, the tax applies to all sparkling wines in bottles with an overpressure of at least 3 bar at 20 °C and which are fitted with a special sparkling wine cork and wire stopper. This definition led to problems with the import of Italian Proseccos in the 1980s. Many of these sparkling wines were fitted with champagne corks and thus wrongly triggered the tax liability - even if the carbon dioxide pressure was too low. For importers, this meant expensive subsequent taxation - sometimes several thousand euros per delivery.

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An expensive luxury with questionable benefits
Currently, the sparkling wine tax is 1.36 euros per 0.75-liter bottle (1,02 euros back when this article was first released - Tobias), plus VAT. Despite an annual tax revenue of around 500 million euros, it remains the smallest of all German consumption taxes - and yet remains politically untouched. One thing is clear: no sparkling or semi-sparkling wine can be better than the wine on which it is based. The often-used phrase “refined wine” is therefore misleading - quality always starts with the original product. - Gerhard Strunz [TS09/08]