German food groups urge Berlin to drop planned sugar and plastic taxes

Germany’s food and beverage industry groups are pressing the federal government to drop planned taxes on sugary drinks and plastic, saying the measures would raise costs, add administrative burdens and run against Berlin’s stated goal of reducing red tape for business.

In a joint statement published on Thursday, October 29, the Bundesvereinigung der Deutschen Ernährungsindustrie, or BVE, and dozens of other trade bodies said they were disappointed by the government’s course. The statement, dated Berlin, Wednesday, October 28, said the proposed sugar tax and plastic tax would impose “significant additional costs” and new compliance duties on companies across the food economy.

The groups said the Federal Ministry of Finance was moving ahead with the plans quickly and without adequate involvement of the affected industries. They also argued that the impact on the European single market had not been sufficiently examined and that the compliance costs cited in the draft legal texts were understated for both businesses and public administration.

A large part of the criticism focused on the planned sugar tax for soft drinks. According to the statement, the ministry wants to use a tax warehouse system modeled on the existing beer tax framework. The associations said that approach would be especially cumbersome because it would force companies to create new tax administration structures instead of relying on existing operating processes or less bureaucratic digital alternatives. They said businesses would also have to invest heavily to adapt production and inventory management systems.

The statement said many production sites are not designed for such a system. It added that, in food and beverage manufacturing, raw materials, production lines and storage capacity are often shared by taxable and non-taxable products. The groups said that extra tax controls, documentation requirements and possible release procedures could interfere directly with established production flows, complicate planning, increase costs and reduce flexibility.

That argument is especially relevant for beverage producers and distributors because taxes tied to drink formulations and packaging could force changes not only in pricing but also in production, warehousing and distribution systems. If adopted, such rules could create new operating costs for brewers, soft drink makers, bottlers, spirits companies and drinks wholesalers, particularly where facilities handle a mix of taxed and non-taxed products.

The industry groups also rejected the planned plastic tax. They said companies are already dealing with extensive and costly packaging obligations under Germany’s Packaging Act, participation in dual recycling systems, the single-use plastics fund levy and new requirements under European packaging rules. In their view, another national tax would add to financial and organizational pressure without delivering additional environmental benefits.

The statement also warned that the two tax plans could weaken Germany as a production base. The groups said that promise of cutting bureaucracy, improving competitiveness and encouraging investment cannot be reconciled with new taxes that come with complex administrative procedures. They said the food industry, which is dominated by midsize companies, needs planning certainty, competitive conditions and fewer regulatory demands.

The breadth of the signatories showed how wide the concern is across the sector. Those backing the appeal included the German Brewers’ Association, Private Breweries Germany, the Federal Association of the German Spirits Industry and Importers, the Soft Drinks Industry Association, the German Mineral Water Association, the German Fruit Juice Industry Association, the beverage wholesale trade association, the beverage retail association, the hotel and restaurant association, and broader food manufacturing, farming and retail-linked groups.

The organizations urged policymakers to stop both tax projects and to involve affected sectors more fully before taking further legislative steps. Even aside from their basic opposition to the sugar tax, they said the proposed tax warehouse model should be dropped. They called for a careful review of the economic effects, the added compliance costs and the implications for the European single market.

The industry groups said they were ready to contribute practical expertise in a constructive dialogue. They said that would require the federal government to avoid presenting companies with a finished plan and instead take their operational experience and proposals seriously. The statement did not include a response from the federal government or the Finance Ministry.