Politics · Germany · 6 hrs ago
German coalition agrees on tax for sugar-sweetened drinks
Germany’s governing coalition has agreed on a tax for sugar-sweetened drinks after a dispute over its details.
The tax is intended to encourage drink makers to reduce sugar and raise money for the federal budget.
From July 1, 2027, drinks with at least 5 grams of sugar per 100 millilitres would face a 26-cent tax rate, rising to 32 cents at 8 grams per 100 millilitres.
Producers making less than one million litres a year would be exempt, according to details of the compromise.
The government expects the tax to bring in about 690 million euros in 2027 and 925 million euros in 2028.
The cabinet is due to consider the proposal on Wednesday, after which the government parties would work to implement it.
The plan had faced opposition, including from nine state ministers responsible for agriculture and consumer protection from the conservative Union parties.
Germany’s governing coalition has agreed on a two-tier tax on sugar-sweetened drinks, according to reports and the Federal Finance Ministry.
The tax is due to start on 1 July 2027 and would apply to drinks with at least 5 grams of sugar per 100 millilitres.
The proposed rates are 26 cents per litre for drinks with at least 5 grams of sugar and 32 cents per litre for drinks with at least 8 grams.
Producers making less than one million litres of sweetened drinks a year would be exempt.
The government expects the tax to raise €690 million in 2027 and €925 million in 2028.
- Who
- Germany’s governing coalition of CDU/CSU and SPD agreed on the proposal.
- What
- It agreed on a two-tier tax on sugar-sweetened drinks, with an exemption for smaller producers.
- When
- The tax is due to begin on 1 July 2027. The proposal is expected to go to the Cabinet on Wednesday.
- Where
- Germany.
- Why
- Finance Minister Lars Klingbeil says the tax is intended to raise revenue and encourage manufacturers to reduce sugar in their drinks.
Germany’s governing coalition
Union agricultural and consumer-protection ministers from the states
Purpose
Germany’s governing coalition
The government says the tax will raise revenue and encourage manufacturers to reduce sugar in drinks.
Union agricultural and consumer-protection ministers from the states
The ministers argue that the tax relies on state direction and unnecessarily increases the cost of certain foods.
The Chancellery temporarily halted its plans for the tax, according to t-online.
Nine Union agricultural and consumer-protection ministers from the states wrote to Chancellor Friedrich Merz opposing the tax.
The coalition agreed on a proposal for a two-tier tax on sugar-sweetened drinks.
The proposal is due to be considered by the Cabinet.
- Start date
- 1 July 2027
- Lower tax tier
- 26 cents per litre for drinks with at least 5 grams of sugar per 100 millilitres
- Higher tax tier
- 32 cents per litre for drinks with at least 8 grams of sugar per 100 millilitres
- Small-producer exemption
- Producers making less than 1 million litres of sweetened drinks annually
- Projected revenue
- €690 million in 2027 and €925 million in 2028
3 sources
Related
Greens and SPD pause Berlin coalition talks with Left Party
2 hrs ago · 12 sources
Alexander Schweitzer takes over as Germany’s labour minister amid reform disputes
12 mins ago · 5 sources
Merz rejects criticism of CDU’s treatment of former minister Bärbel Bas
2 hrs ago · 3 sources
Hesse premier criticises planned tax on sugary drinks
3 hrs ago · 2 sources
What people are saying
The federal government has agreed on drafting assistance for the government parliamentary groups to implement the agreed sugar-drink tax
A sugar tax relies on state direction and unnecessarily places an additional burden on the purchase of certain foods