Germany cabinet approves sugary drinks tax plan

Germany's cabinet approved a draft plan on Wednesday to tax sugary drinks, sending the measure to parliament after a coalition dispute over the proposal.

The finance ministry said the tax was intended to raise money for the public health care system and help protect health, particularly among children and adolescents.

If parliament approves the plan, it would take effect on July 1, 2027. The tax would apply to sodas, energy drinks, lemonades, iced teas, sweetened fruit juices and juice concentrates with added sugar. It would not apply to non-alcoholic beers or wines, or to pure fruit or vegetable juices.

Drinks containing at least five grams of sugar per 100 millilitres would be taxed at 0.26 euros per litre. Drinks with more than eight grams would face a rate of 0.32 euros per litre.

The rates are lower than those proposed last week by Vice Chancellor Lars Klingbeil of the Social Democrats, junior partners in Chancellor Friedrich Merz's coalition. The earlier proposal had drawn opposition from some of Merz's centre-right conservatives.

The compromise is expected to raise 690 million euros next year, 925 million euros in 2028 and up to 890 million euros annually in later years. Beverage industry groups criticised the plan, with the German Brewers' Association calling it “a burden on both consumers and businesses”.