Germany drafts sugar beverage tax starting at 26 cents per liter from July 2027

Three-tier tax structure

Under a draft law presented by Finance Minister Lars Klingbeil, Germany plans to introduce an excise duty on sugary drinks starting 1 July 2027. The draft law establishes a graduated three-tier tax based on total sugar content per 100 milliliters of beverage. Drinks containing 5 to under 7 grams of sugar per 100 milliliters will incur a levy of 26 cents per liter, rising to 32 cents per liter for beverages with 7 to under 10 grams. Drinks with 10 grams or more per 100 milliliters will face the highest rate of 38 cents per liter. For a standard 1.5-liter bottle of classic cola, which contains roughly 10.6 grams of sugar per 100 milliliters, the levy equals 57 cents. Because Germany levies a 19% value-added tax that also applies to excise duties, the retail price could increase by up to 68 cents if manufacturers pass on the entire cost. A 0.33-liter can would increase by nearly 15 cents under the same calculation. The Hamburg consumer protection agency noted that similar levies in the United Kingdom since 2018 prompted many manufacturers to alter their recipes to reduce sugar levels.

Narrowed scope and key exemptions

The draft narrows the reach of the tax compared to earlier benchmark documents released by the Finance Ministry. Drinks containing no added sugar that rely exclusively on sweeteners such as aspartame, including Cola Zero, are exempt from the levy. Pure fruit juices with no added sugar remain untaxed, despite containing natural sugar levels comparable to soft drinks. Unprocessed milk, dietary supplements, pharmaceuticals, non-alcoholic beer, non-alcoholic wine, and non-alcoholic sparkling wine are also explicitly excluded. Previous drafts had set the entry threshold at 4.5 grams of sugar per 100 milliliters and planned to cover plant-based substitutes such as oat, almond, coconut, and rice drinks, as well as milk beverages and non-alcoholic beer mixes. The current draft leaves the final treatment of certain plant drinks and milk-mix beverages subject to ongoing departmental coordination.

Fiscal projections and health insurance impact

The Finance Ministry projects that the levy will generate 945 million euros in revenue during its initial partial year in 2027. Fiscal intake is projected to increase to 1.155 billion euros in 2028, 1.165 billion euros in 2029, and 1.170 billion euros in 2030. The ministry presented the measure not as a general revenue-raising tool for the federal budget, but as an intervention to support public health and restrain rising contribution rates in statutory health insurance funds.

Further contribution increases in statutory health insurance should also be avoided by introducing a tax on sweetened beverages.

Cabinet friction and legislative resistance

The legislative proposal faces resistance within the federal cabinet and across state governments. Agriculture Minister Alois Rainer placed a formal reservation on the draft during cabinet deliberations, expressing concern over the financial burden imposed on medium-sized producers. Rainer requested higher exemption thresholds and additional product carve-outs for domestic food manufacturers. In the Bundesrat, representatives from several federal states expressed opposition during their plenary session on the previous Friday. The CDU/CSU parliamentary group in the Bundestag also demanded amendments before passing the bill. The federal government decided to advance the legislation despite these reservations, announcing that it will submit a coordinated drafting aid to coalition parliamentary groups to accelerate legislative consideration.