German Population Survey: Concerns Over Restaurant Decline Amidst 19% VAT Reinstatement

A recent representative German population survey conducted in Germany has unveiled key insights into the public sentiment regarding the Value Added Tax (VAT) rate on food in gastronomy establishments. Here is a summary of the survey’s findings:

1. Concern for Gastronomy Sector: The survey found that a significant majority, 74% of respondents, expressed concerns about the future of the gastronomy sector if the VAT rate on food in restaurants, pubs, and cafés were to return to 19%. This indicates widespread apprehension among Germans regarding the sector’s prospects.
2. Importance of Gastronomy: The survey highlighted the importance of the gastronomy sector for attractive city centers and social interaction. Around 90% of respondents emphasized the significant role of gastronomy in creating vibrant city centers and promoting social engagement.
3. Support for Reduced VAT: Over 80% of Germans were in favor of maintaining the reduced VAT rate of 7% on food in restaurants. This demonstrates strong public support for a lower tax rate within the gastronomy industry.
4. Resistance to Higher Costs: If the VAT were to be increased to 19%, more than half of the respondents (59%) indicated that they would not be willing or able to pay higher prices for dining out. This resistance to increased costs could pose challenges to the profitability of gastronomy establishments.
5. Impact on Employment: The survey highlighted the potential impact on employment within the gastronomy sector, which employs nearly 2 million people in Germany. A return to a higher VAT rate could place jobs in the industry at risk.
6. Regional Differences: Regional variations were observed in responses, with some states, such as Saxony, Thuringia, Saxony-Anhalt, and Baden-Württemberg, showing higher levels of concern and support for the gastronomy sector.
7. Broad Demographic Agreement: The findings indicated that respondents from various age groups, marital statuses, occupational statuses, and purchasing power levels generally agreed on the importance of gastronomy and the need to maintain a lower VAT rate on food in restaurants.

In conclusion, the survey conducted by Civey on behalf of METRO AG in August 2023 provides valuable insights into the sentiment of the German population regarding the VAT rate on food in gastronomy establishments. It underscores the significance of the gastronomy sector for both city centers and social life and highlights strong public support for a reduced VAT rate. The survey also reveals concerns about potential negative consequences, including the impact on employment and the affordability of dining out, should the VAT rate increase.