Coffee in Portugal: a luxury at home? A reflection on VAT

When we started Caseta Coffee, there was a simple idea behind the project: to make specialty coffee more accessible, not just in quality but also in price. It makes no sense to talk about better coffee if it's then out of reach for daily consumption. And it was precisely from this attempt at balance, between quality and accessibility, that a recent conversation among friends arose. Different areas, different political views, but a common question: does it make sense for coffee to pay 23% VAT when consumed at home?

The answer is not so straightforward, but there is an inconsistency that is difficult to ignore. In Portugal, coffee you buy to make at home is taxed at the maximum rate of 23%, while the same coffee, served in an establishment, drops to 13%. At the same time, activities such as luxury tourism or even playing golf benefit from a reduced rate of 6%. Food products such as milk, pork lard, or other agricultural goods are also at this minimum rate. It's not about comparing completely different realities, but about understanding the criterion: where does coffee fit in, after all?

This question gains even more weight when we look at the current context. The price of green coffee has been at historic highs in recent years, driven by climate change, instability in producing countries, and increased logistical costs. At the same time, there has never been so much information available about coffee as a product. Today we know that moderate consumption is associated with potential benefits, something supported by studies published by institutions such as the Harvard T.H. Chan School of Public Health, the BMJ, or the European Journal of Epidemiology. And, above all, we know that coffee is not an occasional luxury in Portugal; it is part of the routine. It is present from morning to night, at home, at work, on the street.

The point here is not to blindly advocate for a tax cut. It is to understand if there is coherence in how coffee is treated. If the argument is public health, coffee does not seem to be on the wrong side of the equation, especially when compared to other products already covered by reduced rates. If the argument is essentiality, then it becomes difficult to ignore the role that coffee plays in the daily lives of millions of Portuguese. And if the logic is to support the restaurant industry, then another question arises: why is home consumption, where small roasters, specialized stores, and independent businesses try to grow, penalized compared to out-of-home consumption?

There is also a less visible but equally relevant side: the social impact. A 23% rate does not affect everyone in the same way. For those with greater purchasing power, the difference dissolves into the monthly budget. For those who do not, it accumulates. And when talking about a product consumed daily, this difference is no longer negligible.

The most curious thing is that Portugal is not stuck with this decision. The European VAT directive allows for the application of reduced rates to food products, and several countries follow this path. In Spain, coffee for domestic consumption is taxed at 10%. In France, 5.5%. In Germany, 7%. In the Netherlands, 9%. In Greece, 13%. There is no European obligation for coffee in Portugal to be treated as a good subject to the maximum rate. There is, however, a choice.

In the end, the question is simple, but relevant: does it make sense to treat coffee, a cultural, everyday, and increasingly valued product, as a luxury good when consumed at home?

It's not a question with a single answer. But it is, at the very least, a conversation worth having.