Dusseldorf. Consumers will soon have to pay significantly more for a twelve-liter can of classic Cola: more than five euros extra would have been on the receipt from July 2027. The reason is the planned sugar drinks tax. The Handelsblatt was the first medium to report on details of the bill on Wednesday. But surprisingly, the Federal Chancellery temporarily stopped the draft by Finance Minister Lars Klingbeil (SPD) on Thursday.
Handelsblatt learned from government circles that the agreed basis for the introduction of a sugar tax was the proposal from the Health Finance Commission. The proposal from the Ministry of Finance deviates from this and is not capable of gaining a majority in the government in this form.
The Ministry of Finance had previously defused the tax: zero drinks, plant milk, unsweetened juices and spritzers as well as non-alcoholic beers and wines should not be subject to a sugar tax. Nevertheless, producers of lemonades, iced tea and energy drinks sharply criticized the bill.
The tax should bring the tax authorities 1.2 billion euros annually - instead of the 450 million euros proposed by the Finance Commission. At the same time, the tax should reduce the health costs of 3.5 billion euros caused by the consumption of sugary drinks.
The manufacturers feared that the Klingbeil design would lead to rising prices and significant sales losses. Many therefore wanted – as far as possible – to switch to recipes with less sugar and tax burden. Medium-sized beverage producers found themselves at a competitive disadvantage compared to international corporations. The industry warns that the existence of smaller manufacturers is even at risk.
Classic Coca-Cola contains around 35 sugar cubes per liter. That's 10.6 grams of sugar per 100 milliliters. This would mean that Coke would fall under the highest rate of the graduated tax. This stipulates a tax of 26 cents per liter from five grams of sugar, 32 cents from seven grams, and 38 cents per liter from ten grams.
According to the draft law, manufacturers or importers should pay the sugar drinks tax through customs, as with the beer tax. If the tax is passed on in the supply chain, the VAT of 19 percent would be added on top of that.
For a twelve-liter can of Cola, this would be 4.56 euros in sugar tax plus 86 cents in additional VAT. The customer would have paid 5.42 euros more at the checkout. For comparison: Beer tax of around 94 cents is due on ten liters of beer (a typical case of 20).
Lars Wagener, boss of Eckes-Granini, feared even significantly higher prices for consumers. Beverage and supermarkets are likely to add their usual trading margin to the increased manufacturer prices. Wagener puts this at around 40 to 50 percent for the industry compared to the Handelsblatt.
The boss of Europe's largest fruit juice producer gave an example: Even a liter of lemonade in the lowest tax bracket, which previously cost 1.99 euros, would soon have cost 2.42 euros - a price increase of almost 22 percent. “That’s how you drive inflation,” said Wagener. He therefore expected sales volumes to fall.
The entire industry feared that demand for sodas would suffer due to higher prices. Sales of soft drinks, including light products, have been declining recently anyway. In 2025 they fell by almost two percent to almost 5.8 billion euros, according to the Non-Alcoholic Drinks Association (Wafg). Per capita consumption was 125 liters.
Henning Rodekohr, managing partner of Vilsa-Brunnen, expected “serious losses in sales”. Fritz-Kola was also worried. The Hamburg brand is number three in Germany for cola, behind the US brands Coca-Cola and Pepsi. Fritz-Kola is sold primarily in the catering industry, which is already in crisis.
“Further price jumps increase the pressure on businesses and guests there,” said Mirco Wolf Wiegert, founder and managing director of Fritz-Kola. At the same time, he made it clear to the Handelsblatt: “The tax proposal would represent a significant economic burden for us that we cannot bear alone.”
With 10.6 grams of sugar per 100 milliliters, Fritz-Kola Original would fall under the highest tax bracket of 38 cents. That's why the Hamburg company wanted to examine “possibilities for reducing sugar” for various products.
However, Fritz-Kola usually takes twelve to 15 months from the development of a new recipe to market readiness. Wiegert therefore called for the tax to be introduced from 2028 at the earliest. “Changes to recipes are not a simple exchange of individual ingredients,” he said. They required development, tasting and stability testing. In addition, labeling and packaging would have to be adjusted and production changed.
Eckes-Granini also wanted to take a closer look at the recipes of all affected products. This means that price increases for consumers should be as low as possible. Wagener wanted to preserve taste and variety.
Wagener was worried that manufacturers could add sweeteners to sodas and juice drinks in the future. This was seen in Great Britain after the introduction of a sugar tax. “Sweeteners are not a general replacement for sugar,” said the Fritz Kola founder. “They change the taste and mouthfeel and don’t fit with every recipe, especially organic products.”
In recent years, Pepsico has already reduced the sugar content of original Pepsi-Cola to seven grams per 100 milliliters - which is well below the 10.6 grams of its competitor Coca-Cola. Pepsi has partially replaced sugar with the sweeteners acesulfame K and sucralose. The US company was initially unable to find out whether the manufacturer would now further reduce the sugar content in order to minimize the sugar tax.
“The tax does not threaten large international corporations,” said Fritz Kola founder Wiegert. Corporations could offset the costs of customs IT or new recipes via international markets and broad product portfolios. He spoke of distortion of competition: “The sugar tax weakens medium-sized businesses and strengthens the market leaders.”
Detlef Groß, managing director of Wafg, fears that many medium-sized companies will be jeopardized in their operational prospects. “For small businesses, this is about their existence.”
In addition, it is almost impossible for a medium-sized company to set up a customs warehouse in a few months, said Vilsa boss Rodekohr. The Ministry of Finance estimated its own costs of around 89 million euros for customs and IT for the years 2026 to 2029. 200 additional jobs should be created in customs alone.
