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Coalition Reportedly Agrees Sugar Tax Compromise

State ministers have sent a protest letter that could block the measure in the Bundesrat or trigger an EU review.

Overview

  • The coalition reportedly reached the deal on Friday to introduce a levy on sugary drinks starting 1 July 2027 and to exempt producers below about 70,000 liters of annual output.
  • Reported parameters keep the commission’s two-tier model and drop Finance Minister Lars Klingbeil’s proposed third, higher rate, aligning the plan with expert recommendations.
  • Nine CDU/CSU state agriculture and consumer-protection ministers sent a joint protest letter on Sunday opposing the tax and arguing it conflicts with the coalition’s emphasis on voluntariness and personal responsibility.
  • Industry and entrepreneurs warn the levy will create heavy bureaucracy and enforcement costs and may be passed on to shoppers; one media report gave concrete rates of €0.26 per liter for drinks with 5 g sugar/100 ml and €0.32 for 7 g with a half-liter bottle rising about €0.19 if fully passed on.
  • Key steps remain before any law: an EU check of the producer threshold, Bundesrat consideration where state opposition could block the bill, and further parliamentary or executive approvals, so the reported deal is not yet legally binding.