A new federal regulation has upset the hookah industry. On the one hand, because the sale of shisha tobacco has apparently plummeted since July. Since then, a new packaging regulation has been in force. In addition, the black market is said to be flourishing – probably at the expense of German manufacturers. And the state is obviously not doing good business with the new regulation either.
Since July, manufacturers have only been allowed to sell 25-gram packs to retailers and no longer the previously customary packs of 200 or 1000 grams. The smaller pack is designed to prevent hookah bars from reselling the contents of large packs in small portions while paying less tax than they did when buying the large pack. The shisha industry is annoyed by what they consider to be a complicated regulation. Because now a new packaging has to be opened for every shisha pipe in the bar, which is why more waste is produced.
The shisha association complained that it only had a year to make the changeover and is calling for a postponement until spring 2024. Otherwise there is a risk of company bankruptcies. In addition, according to association chief Folke Rega, the legislature has “opened the floodgates to the black market”. Illegal goods from Bulgaria and Turkey are now being sold in private in this country. German manufacturers would be approached by dubious businessmen whether they wanted to sell their bulk packaging machines. The logic behind it: The black market wants to continue to meet the demand for large, cheap packaging and stock up on old machines. Is that true?
The actual aim of the regulation, to prevent tax evasion, does not seem to have been achieved either. The tax rate applicable to water pipe tobacco had risen significantly in January. However, according to the Federal Statistical Office, it is now apparent that the state only collected around 600,000 euros in tobacco tax for these products in July, a fraction of the previous months. In the first eight months of this year, the income amounted to only 37 million euros. The goal of the Federal Ministry of Finance for this year was 127 million euros. In August, the federal government even had to refund dealers and manufacturers 1.8 million euros. Because these had returned control characters that they had previously received.