Germany plans to implement a sugar tax on beverages starting July 1, 2027, following approval by the cabinet on Wednesday for a legislative drafting aid submitted by Finance Minister Lars Klingbeil. The text has been forwarded to the parliamentary groups of the Union and the SPD for debate and implementation. The measure is designed to help stabilize costs within the healthcare system and encourage healthier consumption habits, with the Ministry of Finance estimating that increased consumption of sugared drinks generates annual healthcare provisioning costs of approximately 2.1 billion euros.
The core principle ties the tax burden directly to the sugar content, though the updated proposal reduces the structure from three tiers down to two. Beverages containing between five and less than eight grams of sugar per 100 milliliters will incur a tax of 26 cents per liter, while products containing eight grams or more will be taxed at 32 cents per liter. A previous version of the draft had included a 26-cent rate starting at five grams, 32 cents at seven grams, and 38 cents at ten grams.
The framework includes exemptions for small and independent manufacturers with an annual production volume of up to 70,000 liters, alongside an additional exemption for operations producing up to one million liters, as stated by the Ministry of Finance. These state aid exemptions still require approval from the European Commission.
The tax will apply to products such as cola, orange lemonade, sweetened fruit spritzers, iced teas, energy drinks, and sugary syrups. Alcoholic beverages are excluded because they are generally subject to a separate excise tax, while alcohol-free alternatives, pure fruit and vegetable juices, and unsweetened spritzers are also exempt.
These modifications significantly lower the projected state revenues. For the full year 2027, the federal government anticipates 820 million euros, though the mid-year launch means actual inflows for that year are expected to reach 690 million euros. By 2031, revenues are projected at 890 million euros. Earlier estimates had projected full-year revenues of 925 million euros for 2027 and 1.16 billion euros for 2031. The collected funds are intended to mitigate a planned reduction in federal subsidies to the health fund.
Political and industry reactions to the timeline and financial impact have varied. Alexander Hoffmann, the CSU regional group leader in the Bundestag, told RTL that a start date in early 2028 would be preferable to give companies adequate lead time to reformulate their recipes. Meanwhile, the German Brewers Association expressed strong concern, noting that many of the 1,400 breweries in Germany have increasingly expanded into non-alcoholic beverages due to declining beer sales. The association described the planned tax as a massive burden for consumers and businesses, pointing out that total state revenues will still exceed the amounts recommended by the Health Finance Commission.
