In Germany, hookah tobacco has risen in price by 35% in 2022. Small shops are dying. German hookah lovers order tobacco from Russia.

Source: HOOKAHFLOW In Germany, from 2022 taxes on hookah tobacco have been significantly increased. Most tobacco brands have become 5-8 euros more expensive, which is about 35% more than in 2021. This is a lot, but, unfortunately, local market participants cannot do anything about it. Our partners from Germany, Hookahflow, have compiled a list with prices at which price changes have occurred from each manufacturer.Florian Haidorf (founder of the Hookahflow and Smokedex projects) gave us an interesting comment: “It is not entirely clear how German customers react to the price increase, but it has definitely become noticeable that people are increasingly ordering hookah tobacco from Russia. Some Russian hookah online stores have English and German versions of their websites and send (semi-legally) hookah tobacco to Germany, declaring it as “scented candles” or “tea”.

Also, from July 1, 2022, a new law will come into force with which it is allowed to sell hookah tobacco in packages of no more than 25 gr. (both wholesale and retail). It is noteworthy that the law allows retailers to sell the remnants of the old packaging. As a result, this led to the following: large chains bought tobacco for the future (millions of euros) and at the old price.

As a result, large chains will be able to sell tobacco at the old price for a long time to come. Small stores cannot afford this and will not be able to compete within a year. For example, now it makes no sense to buy our popular 200g Love 66 for 24.90 euros, if you can buy it from a major retailer for 17.90 euros.

And from July 1, 2022, you can buy 25g of tobacco from small shops, while you can get 200g from a large chain for the same price. As the owner of a small retail store in Germany, all this news saddens me, of course. “A little later, we will supplement this article with comments from some tobacco manufacturers from Russia present on the German market.

Hookah Battle took a comment from a representative of the Russian tobacco manufacturer Darkside, represented on the German market:
Philip Gorbachev, Director of International Development, Darkside Corp.:

Darkside Europe has been preparing to increase the tobacco excise almost since mid-2021. We analyzed the situation, communicated with lawyers and our clients – all in order to prevent a situation in which our clients’ business could not withstand the market storm. As a result, we have invested in the necessary stocks of tobacco of our Darkside and Starline brands, which during 2022 can be purchased at 2021 prices. This will allow small businesses to safely survive climate change in the market and smoothly transition all market participants to a new packaging format.

But we already see that the demand for prices in 2021 is growing and we will start bringing packaging with a weight of 25g to the market earlier. We advise our partners from Germany not to postpone purchases.

Evgeny Fedotov, founder of the tobacco consulting agency FedotovGroup:

Of course, we knew about future changes in Germany in the summer of 2021. Many of our partners who are represented in Germany or plan to start sales in Germany were very worried about these changes.

The fact is that despite the fact that there is no ban on the transfer of tobacco from one country to another, it is no secret to anyone that there are no actual borders in Europe, and in the event of a sharp increase in excise, consumers simply start buying tobacco in another country. Thus, the German market can survive, but consumers can start buying in another country.

Today, after a sharp increase in excise taxes in Germany, which is still superimposed by the high cost of a small package (25 grams), there is a high chance that Spain will become the main market for trans-European trade, where excise taxes are more adequate, and any packaging can be traded.

Alejandro Castaño,  Hookah  Battle representative in Spain:

Initially and for legal reasons, the German consumer could not buy tobacco in tobacconists in Spain via online because this is prohibited by law, that is, they could only buy it physically in the establishment. If it’s another type of smoke, yes, of course it could.

On this basis, another worse scenario could be taken into account, given the rise in tobacco prices, and that is that German consumers turn to the smuggling market. The German health authorities should reconsider the increase in taxes because that would have a direct impact on small shops and, above all, on consumers who would be pushed to buy tobacco that does not have the relevant guarantees.

Petr Podrouzek, CMO of Shanti hookah retail chain from Czech Republic:

Due to the fact that SHANTI was established in the early 90’s, and thus, we have had the chance to get to know the world of hookah pretty well, our customers come to us from all around the world. Germany is not an exception.

However, the law does not give us the right to sell any tobacco products with the Czech tax stamp abroad. And even though the taxes risen in Germany, the prices there are still much lower than they are in Czechia. Just take a look at the latest „average cost of the Adalya 50 gram pack“ report processed by FedotovGroup. Czechia is one of the WORST countries in terms of affordability, whereas Germany is among the TOP 5. And that causes Czech hookah lovers going to Germany not so far away and getting tobacco a lot cheaper.

I am not a fan of any restrictions, yet I assume the new German law starting in July might help Czech distributors a little. It will no longer be such a great deal for the Czechs to travel several hundred kilometers to get 25g packs.

Tino Häusler – founder of Germany tobacco consulting agency Verbrauchsteuer.de

Regarding the first issue with new regulations:
True words but not up to date. Since 10.01.22 the GZD (GeneralCustomsHeadoffice) brought a final date where shops may sell their stock. which is 31.12.22! So now all shops are worried about their high stocks. A few companies try to take a lawyer and fight against government.

Regarding the tobacco e-commerce from other countries to Germany:

Off course everybody is talking about spain as a new market for orders because already now there are websides in german language who offer cigarettes up to 8 boxes. But that all is illegal. But still i guess people will take the risks…

Octavian Furtuna – Distributor of Element in Moldova:

For many years of European integration, Moldova has achieved only a visa-free regime, but is still not included in the EU trade zone. As a result, it is legal to transfer more than 250 gr. tobacco across the border does not work. Online stores have the right to sell to foreigners, but there will be problems with delivery, since according to the law of Moldova, postal companies are prohibited from sending excisable goods. All these restrictions will inevitably lead to an increase in smuggling from the countries of the former CIS.