A tax for ships
The Sekt tax and the Imperial Navy: why it's existed since 1902
The Sekt tax was introduced in 1902 in the German Empire to help finance the expansion of the Imperial German Navy. It took effect on 1 July 1902. The fleet is long gone, but the tax lives on: it was reduced to zero in 1933, reimposed in 1939 as a wartime surcharge, and never abolished.
Sekt in the German Empire: from luxury to celebratory drink
By the late 19th century, Sekt was no longer an exotic drink in Germany. Since Kessler began producing it in Esslingen in 1826, numerous producers had sprung up along the Rhine, the Main, and the Saale. In 1892, producers founded the association now known as the Verband Deutscher Sektkellereien. In 1894, two brand names emerged that remain well known today: Henkell Trocken and Rotkäppchen.
Sekt became the drink of the growing middle class, for celebrations, christenings, and weddings. It was more expensive than beer or simple wine, but within reach for many. That was precisely what made it attractive to the state. A tax on a drink considered a luxury yet bought in large quantities promised reliable revenue without raising the price of bread or beer.
1902: why the Sekt tax came for the fleet
Around 1900, the German Empire was building up a large battle fleet. The Fleet Acts of 1898 and 1900, pushed through by State Secretary Alfred Tirpitz at the Imperial Naval Office, called for many new ships. The costs were enormous, and the Empire sought additional revenue. Sparkling wine was one source. In the parliamentary debates, it was essentially argued that with military spending rising so sharply, sparkling wine too should be made to contribute.
The Reichstag passed the law after three readings in April 1902, and it took effect on 1 July 1902. According to secondary sources, 50 pfennigs were added per bottle, which cost on average around 2.50 marks at the time—a surcharge of roughly one-fifth. For the producers, this was a significant blow; for the treasury, a new and steady source of income. The tax has never been abolished since, though its rate has been changed several times.
What became of the fleet, and what became of the tax
The High Seas Fleet that this tax helped fund did not last long. After the First World War, it lay interned at Scapa Flow, a British naval base in the Orkney Islands. On 21 June 1919, the German crews scuttled their own ships there so they would not fall into Allied hands. The tax outlived the fleet by more than a hundred years.
In 1933, the tax rate was cut to zero, but the tax itself was not abolished. The law remained on the books, which made it easy to reactivate. That is exactly what happened in 1939, this time as a wartime surcharge. In 1952, the Federal Republic enacted a new Sparkling Wine Tax Act, and since 1 July 2009 the tax has been governed by the Sparkling Wine and Intermediate Products Tax Act. The quip that the fleet lies at the bottom of the sea while the tax lives on is a bon mot, but at its core, true.
The Sekt tax today: what remains of 1902
Today, the sparkling wine tax is an ordinary federal excise duty, with its revenue not earmarked for any particular purpose. The rate stands at €136 per hectoliter, which comes to €1.02 for a 0.75-liter bottle. An increase from 2027 is planned but not yet decided. Details on the rate, exemptions, and plans are covered in the Gustofolio feature on Sekt in Germany.
What has endured, above all, is the idea of taxing sparkling wine separately. Today, the law draws a line that visibly shapes the market. Semi-sparkling wine (Perlwein) with less than 3 bar of pressure is not subject to the sparkling wine tax, as long as it isn't sealed with a mushroom cork and wire cage. That's why many Secco and Frizzante bottles come with a screw cap or a string tie instead. A tax from the imperial era thus still helps determine the shape of a bottle today.