Finance Minister Klingbeil is planning a sugar tax from 2027 – criticism from the coalition and industry

There are few topics that are as emotionally charged and always end up on Finance Minister Lars Klingbeil's desk as a planned tax on sugary drinks. It was only at the end of August that he had to make it clear on the sidelines of the cabinet meeting in Neuhardenberg that there would be no sugar tax on sugar-free drinks.

A key points paper from his ministry became known at that time. His tax officials also calculated a sugar tax on non-sugary drinks, such as oat milk or zero drinks. Klingbeil immediately spoke up on his Instagram channel and tried to capture it again. “A sugar tax on non-sugar drinks makes no sense,” he said.

Since then, the Ministry of Finance has continued to work on how and, above all, on what a sugar tax can now be levied. A draft on the sugar tax that the Finance Ministry sent to the other ministries on Monday is now causing a lot of criticism in the coalition and is failing to find consensus.

Debates about gram numbers and products

State secretaries from various ministries have been discussing this in the background for days - such as the finance, agriculture and health ministries. It's about what exactly a tax should be levied on. For example, fruit spritzers to which additional sugar has been added are also at issue. But the amount of the tax and the number of grams of sugar are also being discussed.

A commission appointed by the government had originally recommended a staggered sugar tax: around 26 cents of tax per liter should be due on drinks that contain five grams of sugar or more per 100 milliliters. From eight grams of sugar onwards, manufacturers should pay 32 cents. Annual revenue of around 450 million euros can be expected from 2028, the commission wrote.

Protest against Klingbeil's draft

However, the Finance Ministry's draft provides for a different staggering. For example, a tax of 32 cents will be levied on seven grams of sugar and 38 cents on ten grams. The tax should apply from July 1, 2027. According to the Finance Ministry's plans, it should then bring in a good 795 million euros next year - more than the commission appointed had calculated.

This brings many critics to the table. The food industry in particular has been going through a storm for days. The food-pleasure-restaurants union is even calling for a rally in front of the Federal Ministry of Finance on October 8th. Parts of the Union, but also some federal states, are also against it.

For Klingbeil, the planned sugar tax is about a lot because it is crucial for the preparation of the federal budget, as the Finance Ministry repeatedly says. Without this tax, the finance minister would not have enough money to counter-finance the health fund. The federal budget is due to pass through the Bundestag in four weeks. Negotiations are now underway at high speed in the backrooms to find a compromise on the sugar tax with the Union.