Bundesregierung: Kabinett einigt sich auf Zuckersteuer – doch in der Union wächst der Widerstand

The German government's cabinet has agreed on the controversial sugar tax, despite growing resistance within the European Union. The new tax on sweetened drinks will take effect from 1st July 2027, according to the draft, which was seen as "jointly agreed with all ministries" in the provided document. However, resistance is already emerging within the Union faction.

The dispute over the sugar tax escalated within the federal government two weeks ago, as Klingbeil significantly expanded the measure. While originally projected to generate 650 million euros annually, he now expects around 1.2 billion euros. The Reichstag had initially blocked the draft. The final agreement sees a slightly lower tax revenue, with Klingbeil forecasting 820 million euros in the coming year, rising to 890 million euros by 2031.

The compromise includes a two-tiered tax and exemptions for smaller manufacturers. Starting from 1st July 2027, the tax rate will be 26 cents for sweetened drinks with 5 grams of sugar per 100 milliliters, increasing to 32 cents for drinks with 8 grams of sugar per 100 milliliters. Small producers making less than one million liters of sweetened drinks per year are exempt.

The draft is essentially a government's formulation aid for the groups, timed to pass in the 2027 budget where gaps already exist. This approach has logistical reasons: the sugar tax is crucial for the budget where gaps already exist, so it can be adopted in time. The sugar tax in the EU, however, faces significant opposition, especially from agricultural and economic policymakers.

Chancellor Merz's finance minister, Lars Klingbeil, had to face criticism, warning that if there's no majority, the coalition could fall apart. Union faction leader Thorsten Frei (CDU) tried to secure approval for the bill in the Bundestag debate, warning that without a majority, the coalition could break. Critics argue that a new tax on sugary drinks makes no sense, as it does not change consumer behavior, nor does it help businesses.

In fact, many small beverage manufacturers risk closing their doors. The Union faction already raised its concerns two months ago, warning that the tax could close businesses. The proposal has been strongly criticized by regional agriculture ministers, who warned Chancellor Merz and Union faction leader Frei against implementing it.

Some state ministers, like Boris Rhein (Hesse) and Mario Voigt (Thuringia), have publicly opposed the sugar tax, calling it a "high tax." Many Union faction members, including a majority of agrarian experts, also oppose the tax, although the faction leadership insists they must pass the law as agreed. Union members also worry about credibility: they cannot declare that life will become too expensive on Monday after a pre-closure presidential clause, and then introduce a new food tax on Wednesday.

Finally, a federal party conference had rejected the sugar tax in February. The resistance within the faction remains unclear, but finance politicians suggest a majority will eventually emerge.