Germany drafts tiered sugar tax for beverages starting 2027

The German government has released a draft law for a new sugar-sweetened beverage tax, expected to take effect in July 2027. The proposed tax is designed to be tiered based on total sugar content per 100 milliliters, applying to products containing at least five grams of sugar.

The three-tier rate structure is as follows: 0.26 euros for 5 to <7 grams of sugar, 0.32 euros for 7 to <10 grams, and 0.38 euros for 10 grams or more. Targeted products include sodas, flavored waters, syrups, and concentrates. Notably, the draft excludes 'zero' or light beverages, plant-based milks (such as oat milk), non-alcoholic beer, and non-alcoholic wine or sparkling wine. Pure fruit and vegetable juices without added sugar are also exempt.

The measure aims to incentivize manufacturers to reduce sugar content and generate significant revenue for the federal budget. The government anticipates approximately 795 million euros in revenue during the first year, with annual collections expected to rise to around 1.2 billion euros by 2028. These funds are intended to help offset reductions in federal contributions to the health fund. The proposal remains a subject of political debate, with opposition from parts of the CDU/CSU regarding the tax's implementation.