Germany’s coalition government has finalized plans for a sugar tax on sweetened beverages, set to take effect on July 1, 2027.

The German coalition government, consisting of the Union (CDU/CSU) and SPD, has resolved a long-standing dispute over the introduction of a sugar tax on sweetened beverages. The cabinet approved a compromise proposal, which will now be discussed and implemented by the Bundestag. The tax aims to stabilize costs in the healthcare system and is scheduled to begin on July 1, 2027.

The sugar tax will apply to beverages with a sugar content of at least five grams per 100 milliliters, including sodas, iced teas, energy drinks, and fruit juice drinks with added sugar. Alcoholic beverages, alcohol-free beers, wines, cocktails, pure fruit and vegetable juices, unsweetened spritzers, and drinks with artificial sweeteners (such as zero-calorie sodas) are exempt. Small and independent manufacturers producing up to 70,000 liters annually, as well as businesses producing up to one million liters, will benefit from exemptions, pending approval from the European Commission.

The tax will be levied in two tiers: beverages with five to less than eight grams of sugar per 100 milliliters will incur a charge of 26 cents per liter, while those with eight grams or more will be taxed at 32 cents per liter. The government anticipates that the tax will generate €690 million in revenue in 2027 and €925 million in 2028, which will be used to stabilize contributions to the statutory health insurance system. The legislation also aims to encourage manufacturers to reduce sugar content in their products, potentially mitigating price increases for consumers.