The German Federal Government has significantly narrowed the scope of its proposed sugar drink tax compared to earlier plans. According to the draft legislation reported by the “Handelsblatt”, certain beverages, such as Coke Zero and non-alcoholic beer, will not be subject to the new tax.
The draft specifies that a consumption tax will be introduced on sugary beverages, tiered according to their total sugar content. The tax will apply to drinks where the total sugar reaches at least five grams per 100 milliliters.
Items like fruit and vegetable juices, non-alcoholic drinks such as lemonades, flavored or sweetened waters, concentrates, and syrups would be subject to this tax. However, exemptions are in place for fruit and vegetable juices without added sugar, as well as products regulated under the Medicines Act. The draft explicitly excludes non-alcoholic wine, non-alcoholic sparkling wine, and non-alcoholic beer.
The tax rates are calculated as follows: €0.26 for a total sugar content ranging from 5 to just under 7 grams per 100 milliliters; €0.32 for a sugar content between 7 and just under 10 grams per 100 milliliters; and €0.38 for a content of 10 grams or more per 100 milliliters.
Regarding finances, the Federal Government projects that the new tax will generate €795 million in revenue next year. Starting in 2028, this revenue stream is expected to increase annually by €1.2 billion. The primary goals of the sugar drink tax are to partially offset reductions in the federal subsidy to the health fund and to ultimately reduce the consumption of sugar in sweetened beverages.
Despite these provisions, the sugar drink tax remains highly contentious within the government. Some factions within the Union party are currently advocating against implementing the tax. Furthermore, a previous outline paper from the Federal Ministry of Finance caused considerable internal controversy, as it had included considerations for taxing sugar-free zero-sugar drinks.
