From July 1, a new increase in coffee prices is expected: VAT 24% for those sitting in a cafe

Again, bad news regarding coffee prices in Greece: from July 1st… will rise in price at public catering outlets.

In today's interview, the Prime Minister chose to focus maintaining a reduced VAT rate of 13% on drinks and non-alcoholic drinks, not related to the service sector, as well as taxi fares. He even admitted that “because the situation in public transport is not as we would like”, he considers it important that “taxis were accessible to the average citizen”and the same goes for takeaway coffee.

The other half-truth he didn't tell is that 24 per cent VAT on coffee and other takeaway drinks is being reintroduced from 1 July, and high VAT on soft drinks is also returning from 1 January.

The increased VAT levied on catering establishments will be fully passed on to the consumer

According to the Ministry of Economy and Finance, the reintroduction of increased VAT on drinks served in cafeterias (coffee, tea, cocoa) will lead to savings of 43 million euros per year, which will partially offset the fiscal costs of extending the reduced VAT on delivery and takeaway drinks, which are estimated at 65 million euros per year.

“It is logical that with this method of supplying goods, VAT is higher than in delicatessens and takeaway shops,” – said a representative of the Ministry of Economy, and a government representative noted “steps demonstrating the government's strong economic policy” aimed at “lowering taxes, increasing citizens' incomes, increasing investment and jobs, and helping the most vulnerable segments of the population.”

The official opposition issued a statement in response, in which SYRIZA President Stefanos Kasselakis said: “Citizens' lives cannot be improved by extraordinary benefits based on Mr. Mitsotakis's electoral statistics. The citizens of this country are proud. They want solutions and immediately.”

Nikos Androulakis, President of PASOK, said: “I urge the Prime Minister to stop the delay in communication and look into PASOK-Movement for Change’s budget proposals to cut VAT on essential goods, expand controls and create a Single Consumer Authority.”

Reaction from the food service sector

As expected, catering professionals have mobilized, writing to the Minister of National Economy and Finance, Kostis Hatzidakis, asking for a horizontal retention of VAT at 13% on coffee and soft drinks.“It is extremely difficult for us to understand the logic behind this increase when coffee is already burdened with excise tax since 2017.”noted a letter from the Panhellenic Federation of Restaurants and Related Professions (Posei).

In their opinion, “the increased VAT from catering establishments that will be called upon to apply it will be completely passed on to the consumer, given that international coffee prices over the past six months have increased by 17% for the Arabica variety and by 50% for the Robusta variety %”. Industry experts have already calculated that from July 1, the price of served coffee will increase by at least 20-30 cents, for example from 3.50 to 3.80 euros (almost 9%).

Double meaning

In their letter to the minister, catering professionals stress that the reintroduction of VAT will further increase inflation and high prices – problems that the government at least rhetorically recognizes as the most important, saying it is doing everything possible to effectively address them.

“This chaotic gap between words and deeds has caused severe dissatisfaction in the industry. And unfortunately, this is not the first time that the government has announced that it will not raise any taxes, but has already done so at least twice: once with an increase in VAT on taxes soft drinks and once in the next few days with a corresponding increase in coffee.”

Networks benefit

ΠΟΕΣΕ emphasizes that both decisions, according to professionals, are nothing more than “measures to raise revenue at a time when government revenues are constantly increasing.”

Likewise, they called the policy outrageous “double standards” – rules that they say “impose a burden on only one part of the business, thereby increasing unfair competition.” They also note that the reduction in VAT on coffee benefits mainly large coffee and food chains, which, after all, specialize in “simple” franchises and delivery franchises.

Drink your coffee standing up – that's, in other words, what the government is telling the “average citizen” whose benefit it theoretically cares about. Anyone who wants to sit at the table will pay significantly more.

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