We are glad to introduce and show our support to a very important initiative here in our HILO-Blog. We have ONE Germany as guests to tell us more about their petition for removing the German Coffee Tax from fairly traded coffee. We were very excited to learn about it, as you can see in our price transparency infographic, the Coffee Tax represents an important percentage of the final sales price. We strongly believe that a tax incentive can help consumers in making better purchase decisions, and support fairly traded coffee in the German market, generating a big positive impact. So here is their explanation!
ONE Germany and nuruCoffee plead for a fair coffee tax law
Whether it’s espresso, cappuccino, or from a filter machine – the coffee in your cup is taxed extra in Germany. That hasn’t changed since a coffee tax was introduced more than 230 years ago. The international trading world today, however, is a very different one: Supply chains are more complex, many farmlands are threatened by climate change, and producers of goods like coffee are increasingly affected by poverty. Small farmers in the Global South are hit particularly hard. Meanwhile, companies in industrialized countries are profiting from rising sales in the coffee sector – including in Germany, where the average consumption is of 166 liters of coffee per person each year. Sadly, just one in every 20 cups is fairly traded.
Currently, an additional €2.19 must be paid to the state for every kilo of roasted coffee, and the tax rate for soluble coffee is as high as €4.78 per kilo – regardless of whether or not production adheres to appropriate environmental and social standards. Fairness and trade on an equal footing in supply chains make a significant contribution to global justice, while conventional trade continuously exacerbates inequalities. At the same time, fair trade coffee is often more expensive than conventional alternatives, where the true price is hidden behind the losses to people and the planet during the production process.
nuruCoffee and ONE Germany want more fair trade and sustainably produced coffee to be drunk in Germany. If Germany would exempt fair trade coffee from coffee tax, it would become more attractive for consumers in Germany. If demand increases, more coffee can be produced under decent conditions and more coffee farmers can make a living from their work. Germany has committed to achieving the Sustainable Development Goals by 2030. We demand that the implementation of this promise is also reflected in tax policy. After all, fair supply chains drive many sustainability goals such as poverty reduction, equality and sustainable growth. Fair coffee must no longer be considered a luxury product, but must become the new coffee standard. With the Coffee Tax Act, the German government already has a suitable instrument in its hands. And one thing is certain: compared to the added value for poverty reduction and sustainability, the loss in taxes would be negligible.
Would you like to join Sara Nuru, founder of nuruCoffee, and ONE in getting Germany closer to the Sustainable Development Goals? Then sign the petition and call on Finance Minister Olaf Scholz to exempt fair trade coffee from coffee tax.
Curious? In the position paper, nuruCoffee and ONE explain their demands in detail.
ONE is an international movement working to end extreme poverty and preventable diseases by 2030. So that every person can live a life of dignity and opportunity.
Colleagues and supporters of ONE are convinced that the fight against poverty is not about handouts, but about justice and equality. That’s why they are campaigning and lobbying governments to do more to fight extreme poverty and preventable diseases, especially in Africa.