German beverage groups urge the government to scrap a sugar tax that would add €5 to a crate of cola

Six of Germany’s leading beverage industry associations called on Monday for the government to abandon or substantially rewrite a planned sugar tax, saying the measure would raise prices for consumers, add heavy compliance costs for companies and create a new layer of bureaucracy across the drinks market.

The push came after a draft law from the Federal Ministry of Finance was again sent back in early October because of concerns from other ministries, delaying cabinet consideration. In a joint statement, the associations said the government and parliament should now stop the plan altogether, arguing that a new consumer tax would come at the wrong time for both households and manufacturers.

The groups said the tax would make many soft drinks noticeably more expensive and would hit companies that are already dealing with higher costs for energy, labor, logistics and raw materials. They also argued that the plan conflicts with the government’s stated goal of reducing red tape for businesses.

According to the industry statement, the latest draft sets tax rates of 26 euro cents, 32 euro cents or 38 euro cents per liter, depending on sugar content. The associations said that would add more than €5 to a standard crate of lemonade or cola. They also said the tax would increase the base price on which Germany’s 19% value-added tax is calculated, further lifting retail prices.

As an example, the groups said a 1.5-liter bottle in the highest tax band would face 57 euro cents in sugar tax alone, and that the added VAT on the higher selling price would lift the total extra amount to about 68 euro cents.

The associations said the burden would go beyond the tax itself. They warned that companies would have to spend heavily on IT systems, administrative processes, product documentation and changes to internal operations in order to classify products correctly, record sugar content and file tax declarations. They said recipe changes could trigger repeated reviews and updates to those systems.

That concern is especially important for Germany’s wider beverage industry because the proposed tax would not only affect soft drink producers. Breweries and other beverage companies that sell nonalcoholic products could also need to adjust tax reporting, software, warehousing and distribution processes if the measure takes effect, potentially affecting manufacturers and distributors across mixed product portfolios.

The groups said smaller companies could be hit hardest. They criticized a proposed exemption for businesses producing up to 70,000 liters a year, calling it largely ineffective and saying the threshold is too low to offer meaningful relief.

They also attacked the implementation timetable. The draft would apply the new tax from July 1, 2027, a schedule the associations described as far too tight for both industry and customs authorities. They said companies cannot install new tax, IT and documentation systems at short notice and argued that, if lawmakers insist on moving ahead, the parliamentary process must include a much longer transition period.

The associations also pointed to the cost of administering the measure inside the state. Based on figures they said have been disclosed so far, customs and IT spending between 2026 and 2029 would total about €89 million, and at least 200 additional customs posts would be created. The groups said those figures show the proposal would require a large enforcement apparatus even before counting the added compliance burden on thousands of businesses.

They further argued that the Finance Ministry is overestimating the revenue the tax would bring in while underestimating the cost of collecting it. In their statement, the associations said they could not see evidence that the bureaucracy costs for companies had been robustly included in the government’s cost estimates.

The industry bodies described the measure as unfair and arbitrary, and said that, at a time of high living costs, policymakers should be focused on growth, investment and lower bureaucracy rather than a new excise-style levy on everyday products.

If the governing coalition of the Christian Democrats and Social Democrats decides to keep the tax in place as part of federal budget planning, the associations said the draft should be fundamentally revised and the affected industries should be closely involved. They called for a fuller impact assessment covering not only expected tax revenue but also effects on consumer prices, midsize businesses, investment, competitiveness and administrative costs in both the public and private sectors.

The joint statement was issued by the Association of German Mineral Springs, the German Fruit Juice Industry Association, the German Brewers Association, the Federation of German Food and Drink Industries, the Economic Association of Non-Alcoholic Beverages and the Association of Private Breweries Germany.