Germany’s planned sugar tax will target soft drinks and other sweetened beverages containing at least 5 grams of sugar per 100 millilitres, with the government hoping to encourage manufacturers to reduce sugar levels and help finance the country’s healthcare system.
The German cabinet has approved draft legislation introducing the levy from 1 July 2027, subject to approval by the Bundestag. If adopted, the measure would make Germany one of several European countries to tax sugary drinks as part of efforts to address health concerns linked to excessive sugar consumption.
The government says the tax could generate hundreds of millions of euros in additional revenue while encouraging beverage producers to reformulate their products. High consumption of sugary drinks is associated with obesity, type 2 diabetes and tooth decay, adding to the costs faced by Germany’s healthcare system.
According to the federal government, the policy responds to long-standing demands from organisations working in public health, scientific research, child protection and consumer protection.
The proposed tax is also intended to ease financial pressure on Germany’s statutory health insurance system. The government estimates that the levy could raise around 690 million euros in 2027 and 925 million euros in 2028. The additional revenue could help limit planned reductions in federal funding for the central health fund, potentially reducing pressure to increase health insurance contributions.
However, the final impact on consumers will depend on how manufacturers and retailers respond to the new charges.
Under the proposed rules, drinks containing between 5 grams and less than 8 grams of sugar per 100 millilitres would face a tax of 26 cents per litre. Beverages containing 8 grams of sugar or more per 100 millilitres would be taxed at 32 cents per litre.
Products likely to fall within the scope of the levy include Coca-Cola and other sugary soft drinks, iced teas, energy drinks, fruit nectars and concentrates containing added sugar. The precise treatment of individual products will depend on the final legislation.
Not every sweetened or naturally sugary drink would be affected. Alcoholic beverages, including their non-alcoholic alternatives, are excluded from the proposal. Milk drinks, oat drinks and rice drinks would also be exempt, along with pure fruit and vegetable juices. Drinks sweetened with alternatives to sugar would not be subject to the proposed levy.
Although manufacturers and wholesalers would be responsible for paying the tax, consumers could see higher prices in shops and supermarkets. The government expects the levy to add tens of cents to the price of some sugary drinks, although the actual increase will depend on how businesses pass on the cost.
The proposal also provides exemptions for smaller producers. Manufacturers with annual production of up to 70,000 litres would not have to pay the tax. A further exemption for businesses producing up to one million litres annually would depend on approval from the European Commission under EU state aid rules.
The government’s plan has attracted criticism over its potential impact on consumers and the beverage industry. Hessian Minister-President Boris Rhein of the Christian Democratic Union has argued that the tax could make drinks more expensive and put jobs in the sector at risk.
Questions have also been raised about whether higher prices would produce substantial improvements in public health. In a 2025 report, the US-based Tax Foundation argued that while taxes on sugary drinks generally raise their prices, evidence of significant improvements in health outcomes remains limited. The organisation also noted that some manufacturers respond by reducing sugar in their products, although this does not necessarily lead to a comparable reduction in overall sugar consumption.
The debate reflects a wider disagreement over how governments should address diet-related health problems. Supporters see a tax linked to sugar content as a way to encourage manufacturers to reformulate drinks and give consumers a financial incentive to choose lower-sugar alternatives. Critics question whether the measure will change purchasing habits enough to justify its cost to consumers and businesses.
Germany would not be the first European country to introduce such a levy. France, Portugal and Hungary already tax sugary drinks, although their systems differ in design and scope. Hungary introduced a broader public health tax in 2011 covering certain products considered to have high levels of sugar, salt or other ingredients associated with health risks.
For German consumers, the immediate question is which products will become more expensive and by how much. For manufacturers, the proposed tax could create an incentive to lower sugar content to avoid the higher rate. The legislation must still pass through the parliamentary process before the planned start date of 1 July 2027 can take effect.
