Germany Proposes a Sugary Drinks Tax to Raise EUR 1.2 Billion a Year

Germany’s Finance Ministry has circulated a draft law that would impose a new tax on sugary drinks starting July 1, 2027, setting out a three-tier system that would raise costs for many beverage makers while exempting non-alcoholic beer, non-alcoholic wine, non-alcoholic sparkling wine, and some juice-based drinks.

According to the draft, the tax would apply to beverages containing at least five grams of sugar per 100 milliliters. Drinks with five to seven grams would face a levy of EUR 0.26 per liter. The rate would rise to EUR 0.32 per liter for beverages with seven to ten grams of sugar per 100 milliliters, and to EUR 0.38 per liter for drinks with more than ten grams. Concentrates and syrups would be taxed based on the volume of the final ready-to-drink product.

The proposal would exempt a number of categories. Non-alcoholic beer would not be taxed, nor would non-alcoholic wine and non-alcoholic sparkling wine. Pure fruit and vegetable juices with no added sugar would also be exempt, as would spritzers made only from pure juice and carbonated water. Plant-based milk alternatives and milk-mix beverages would remain outside the levy. Drinks with no sugar, including diet sodas, would also avoid the tax because they fall below the minimum threshold.

At the same time, the draft would pull in some products that matter directly to brewers and other drinks makers. Traditional malt beverages and Fassbrausen, a sweet soft drink category with roots in brewing, are expected to be treated like regular soft drinks under the plan. That could create a new regulatory and pricing issue for breweries that sell these products, and it could push some companies to rethink product ranges, recipes, or positioning before the tax takes effect.

The federal government expects the measure to bring in about EUR 1.2 billion a year, according to the draft. That figure is more than double an earlier estimate of EUR 550 million. The tax is part of a broader fiscal effort by the government, which had already signaled plans to use levies on sugar and spirits to help address budget shortfalls.

The draft has already drawn criticism inside the government and beyond. According to the report on the circulated text, the Finance Ministry gave other ministries only 24 hours to submit comments, a timetable that some officials viewed as too short for a measure with broad economic and public health implications. Some departments have reportedly asked for the proposal to be reopened for negotiation.

Political opposition is also taking shape. Hesse’s state premier Boris Rhein and Thuringia’s state premier Mario Voigt have voiced disagreement with the plan, as has Christina Stumpp, a spokeswoman on agricultural policy. Their objections add to a growing debate over whether the tax is primarily a health measure or a revenue measure.

Germany’s beverage industry has reacted strongly against the proposal. The Deutscher Brauer-Bund, the national brewers’ association, and Privaten Brauereien Deutschland, which represents private breweries, have both opposed the draft. The brewers’ group said many of Germany’s roughly 1,400 breweries have increasingly depended on non-alcoholic soft drinks as an important secondary source of revenue as beer sales have declined. For that reason, even with non-alcoholic beer excluded, a tax on sweet soft drinks, malt beverages, and Fassbrausen could affect a part of the business that some breweries have used to offset weakness in their core market.

Privaten Brauereien Deutschland said the proposal would create disproportionate bureaucratic costs, especially for smaller breweries. That concern is likely to resonate beyond beer producers, since small and midsize beverage companies often have fewer resources to handle product classification, sugar-content verification, and new tax reporting requirements.

The fruit juice industry has also pushed back. The Verband der deutschen Fruchtsaft-Industrie criticized the measure, and its president, Heinrich Prinz Reuss, called the tax a burden on consumers disguised as a health policy. He argued that the public health case is being used mainly to justify extra state revenue. The Bundesvereinigung der Deutschen Ernährungsindustrie, an umbrella group for the food industry, has called for a realistic economic and scientific impact assessment before lawmakers move ahead.

The cabinet is expected to review the draft in mid-October. It would then go to the Bundestag for initial deliberations, with a final decision anticipated in mid-to-late November as part of a broader budget companion law, if the measure remains in the legislative package.