Germany’s Federal Cabinet approved a draft proposal for a sugar-sweetened beverage tax on 14 October 2026, with the measure set to take effect on 1 July 2027, subject to parliamentary approval. The tax was expected to generate additional federal revenue to help stabilise statutory health insurance contributions.
Germany’s Federal Cabinet approved a legislative proposal on 14 October 2026 to introduce a sugar-sweetened beverage tax, with the government aiming to reduce excessive sugar consumption, protect public health and stabilise statutory health insurance contributions.
The proposal, prepared for the governing parliamentary groups in the German Bundestag, followed a commitment by the coalition government. It also responded to longstanding calls from health, scientific, child protection and consumer protection organisations, as well as a recommendation from the Health Finance Commission.
Excessive sugar consumption increases the risk of obesity, type 2 diabetes mellitus, cardiovascular diseases and tooth decay. Healthcare costs attributable to increased consumption of sugar-sweetened beverages are estimated at approximately EUR 2.1 billion annually.
The proposed tax is intended to reduce these costs over the longer term while helping maintain stable statutory health insurance contributions. It also aims to promote fairness by requiring those whose sugar consumption places a greater burden on the healthcare system to contribute more towards its financing.
Two-tier tax rates proposed
If approved by the German Bundestag, the tax will take effect on 1 July 2027 and apply to sugar-sweetened beverages containing at least 5 g of total sugar per 100 ml.
The draft legislation proposes two tax tiers based on sugar content:
- Tier 1: EUR 0.26 per litre for beverages containing at least 5 g but less than 8 g of sugar per 100 ml.
- Tier 2: EUR 0.32 per litre for beverages containing 8 g or more of sugar per 100 ml.
The tax will cover soft drinks, including cola, orange lemonade and sweetened fruit juice spritzers, as well as iced teas, energy drinks, fruit nectars and fruit juice concentrates containing added sugar.
Sugar-containing syrups and concentrates intended for preparing beverages will also fall within the scope of the tax if supplied to the catering industry or consumers. These products include post-mix concentrates and syrups used in drinking water carbonators.
Exemptions for several beverages
Alcoholic beverages will be excluded from the proposed tax because they are generally already subject to other excise duties. Exemptions will also cover non-alcoholic alternatives, including non-alcoholic wine, fruit wine, sparkling wine, beer, liqueurs and cocktails, as well as mixed drinks based on these products.
Other exempt products will include milk, oat and rice drinks and corresponding mixed beverages; pure fruit and vegetable juices; pure fruit and vegetable juice concentrates; and corresponding unsweetened juice spritzers. Beverages sweetened with sweeteners will also remain outside the scope of the tax.
As is customary for excise duties, manufacturers and wholesalers will be liable for the tax.
The draft provides exemptions for small, independent manufacturers producing up to 70,000 litres annually. A further exemption is proposed for businesses producing up to 1 million litres per year. However, the latter exemption, classified as a state aid measure, will depend on approval by the European Commission.
Revenue to support health insurance stability
The proposed tax is expected to generate additional federal revenue of EUR 690 million in 2027 and EUR 925 million in 2028. Annual additional revenue is projected to range between EUR 875 million and EUR 890 million from 2028 to 2031.
The revenue will be used to help stabilise statutory health insurance contributions.
The German Bundestag adopted the Statutory Health Insurance Contribution Rate Stabilisation Act on 10 July 2026, which also provided for the introduction of a sugar-sweetened beverage tax. The proposed legislation represents a further step towards implementing that measure.
