The German Cabinet greenlit on Wednesday a new tax on sugary drinks, aiming to raise revenue and incentivize manufacturers to make healthier products.
The tax, which still requires parliamentary approval, would apply to sweetened drinks with a total sugar content of at least 5 grams per 100 milliliters. According to the Finance Ministry, these include lemonades, iced teas, energy drinks and fruit juices with added sugar.
Alcoholic drinks, non-alcoholic beers, wines and cocktails would not be affected. Pure fruit and vegetable juices, unsweetened fizzy drinks and those containing sweeteners – so-called zero drinks – would also be exempt.
Two tax bands are planned depending on sugar content. Exemptions are envisaged for small producers, though the precise thresholds have yet to be finalized.
The German government is seeking an exemption for all businesses producing a maximum of 1 million liters per year, but this requires authorization from the European Commission.
The new tax is due to come into force on July 1, 2027. It could generate 690 million euros ($772 million) for the federal government next year, with revenues of 925 million euros projected for 2028 and between 875 million euros and 890 million euros in subsequent years.
The revenue is intended to help keep contributions to the statutory health care system stable. At the same time, the tax is designed to incentivize beverage manufacturers to reduce the sugar content of their products.
