Germany's coalition agrees two-tier sugar tax, up to 32 cents per litre from July 2027

Two tiers replace the three-stage plan

Union and SPD have agreed on a tax on sweetened drinks, according to a cabinet draft that RND obtained and reported on Tuesday evening, 13 October. The compromise drops the third rate that the Finance Ministry had planned, a 38-cent tier for drinks with at least 10 grams of sugar per 100 millilitres. Drinks with at least 5 grams of sugar per 100 millilitres would be taxed at 26 cents per litre, and those with at least 8 grams would pay 32 cents. Producers that make fewer than one million litres of sweetened drinks a year would not pay the tax, and the levy is due to apply from 1 July 2027.

Ministry officials confirmed the deal on Tuesday evening, describing the agreement in a formal statement.

The federal government has agreed on a drafting aid for the coalition parliamentary groups to implement the agreed sugar drink tax.

Revenue projections fall but stay above expert estimates

The government expects the tax to bring in 690 million euros in 2027 and 925 million euros in 2028, according to the figures in the draft. The first draft had assumed 795 million euros for 2027 and 1.215 billion euros for 2028, so the revised numbers are lower. The Finance Commission on Health had recommended a tiered tax at the end of March and expected annual revenue of 450 million euros, which means the projections remain well above that level. The higher projections partly reflect that concentrates and syrups are also covered, not only soft drinks such as soda and cola. Natural fruit juices without added sugar and food supplements remain exempt.

The coalition dispute and the Chancellery's pause

The Chancellery had temporarily stopped Klingbeil's plans at the start of October, because government circles said his draft departed from the health finance commission's proposal and lacked a majority in cabinet. A few days before the compromise, nine Union agriculture and consumer protection ministers from the states wrote to Chancellor Friedrich Merz to oppose the tax. In their letter they argued that a sugar tax relies on state steering and adds an unnecessary extra burden on buying certain foods. Finance Minister Lars Klingbeil, an SPD politician, wants the levy to raise revenue and to give manufacturers an incentive to lower the sugar content of their products.

Nursing commission and co-payments

The same draft reportedly settles the dispute over the mandate for the planned Pflegestrukturkommission, the nursing structure commission. At the SPD's request, the commission is to examine a 'limitation' on the sharply rising co-payments in nursing homes, but the draft describes this only as a review task. The term 'Pflegedeckel' used by the SPD does not appear in the draft from Health Minister Carsten Linnemann (CDU). The commission is also to examine an SPD demand that privately insured people help finance statutory long-term care, although the draft's wording on this point is very general. The panel would have 13 experts, chaired by former Caritas general secretary Georg Cremer and by Gabriele Kuhn-Zuber, president of the Catholic University of Applied Sciences for Social Work in Berlin (KHSB).

What happens next

The cabinet is scheduled to take up the draft on Wednesday, 14 October 2026. The tax would first be levied on 1 July 2027, and the revenue figures in the draft assume that start date. The Chancellery had held back the earlier version in early October, so the cabinet session will show whether the revised text now has the majority that the earlier draft lacked. The timeline runs from the expert recommendation at the end of March to the planned start of the levy in July 2027.