German restaurant VAT cut fails to lower prices, union says

BERLIN, Sept 17 (Reuters) - Germany's €4 billion VAT cut for restaurants has largely failed to benefit diners, with only around 1% of more than 180,000 dishes surveyed becoming cheaper, the Food, Beverages and Catering Union (NGG) said on Thursday.

The governing coalition permanently reduced VAT on food served in restaurants to 7% from 19% at the start of 2026, fulfilling a long-standing demand from the hospitality industry.

But a study by wmp consult, commissioned by NGG, found that prices remained unchanged for 91% of dishes examined at more than 12,000 restaurants, while around 8% became more expensive. 

"If the tax relief had been fully passed on to consumers, final prices could theoretically have fallen by around 10%," NGG said.

Union chief Guido Zeitler said neither customers nor workers had benefited from the measure, calling for higher wages and better working conditions instead.

(Reporting by Maria Martinez and Klaus Lauer; Editing by Toby Chopra)