The German government coalition has reportedly reached an agreement regarding the introduction of a sugar tax. The levy is set to come into effect on July 1, 2027, which is six months later than originally planned. During the contentious discussions over the proposed tax rates, Federal Finance Minister Lars Klingbeil (SPD) played a significant role, ultimately rejecting plans for an additional tax level.
To prevent smaller businesses from being overwhelmed by bureaucracy, the final agreement introduces a threshold: the tax will only apply to production volumes exceeding 70,000 liters per year. Furthermore, the expansion of this limit, potentially up to one million liters annually, is slated to be reviewed by the EU Commission under European law. This safeguard means that artisan and family-run companies will not incur additional burdens, but major corporations such as Coca-Cola and PepsiCo will be fully affected, and consumers should anticipate noticeable price hikes for their products.
In drafting the specific rates, the Finance Ministry yielded to pressure from the Union. Under the current framework, a tax of 26 cents per liter will apply to beverages containing up to 4.5 grams of sugar per 100 milliliters. For drinks exceeding 7 grams of sugar per 100 milliliters, the rate will rise to 32 cents per liter.
Klingbeil confirmed that the plan avoids the introduction of a third, tougher tax stage that would have imposed a 38-cent-per-liter levy on cola and similar drinks containing more than 10 grams of sugar per liter. The solution thus remains the two-tier model, which had previously been recommended by the relevant commission for the reform of statutory health insurance funds-a recommendation the Union had explicitly tied its approval of the reform to.
