The federal government apparently agrees on a two-tier model for sugar taxes

The black-red coalition has resolved its differences over the introduction of a tax on sugar-sweetened drinks. The Federal Ministry of Finance said that the federal government had agreed on “formulating assistance for the government factions to implement the agreed sugar drinks tax”.

According to the information, the proposal will be approved by the cabinet on Wednesday. The editorial network Germany (RND) and the Bild newspaper had previously reported on it.

Two-tier tax and one exception

According to RND, the compromise provides for a two-tier tax and exceptions for smaller manufacturers. As can be seen from the so-called formulation aid, which is also available to the dpa news agency, a tax rate of 26 cents will be levied on sweetened drinks with a sugar content of five grams per 100 milliliters or more from July 1, 2027. With a sugar content of eight grams per 100 milliliters, the rate should be 32 cents.

According to RND, the tax should not apply to manufacturers that produce less than one million liters of sweetened drinks per year.

Resistance until the end

With the sugar tax, Federal Finance Minister Lars Klingbeil (SPD) not only wants to generate income for the federal budget, but also give beverage manufacturers an incentive to reduce sugar content and make their products healthier. According to the current agreement, the federal government assumes that the tax will bring the federal government around 690 million euros in 2027 and then 925 million euros in 2028.

The Chancellery initially stopped Klingbeil's plans at the beginning of the month. In government circles it was said that his draft differed from the proposal of the Health Finance Commission and that it would not have a majority in the government in this form.

There was considerable resistance to the tax until recently. A few days ago, the Union's nine agriculture and consumer protection ministers from the federal states also spoke out against it in a letter to Chancellor Friedrich Merz (CDU). A sugar tax relies on state control and unnecessarily puts an additional burden on the purchase of certain foods, criticize the department heads in the letter.