A leaked paper revealed that the planned ‘sugar tax’ on sugary drinks could also be applied to oat milk and sugar-free sodas. Here’s what we know as German leaders continue to debate the issue.
The German government is working on introducing a “sugar tax” that would see consumers pay a levy on sugary soft drinks.
But a leaked paper from the federal Finance Ministry revealed that the tax could apply to more beverages than originally thought – and perhaps even sugar-free fizzy drinks.
As of Wednesday, however, Finance Minister Lars Klingbeil said the likes of Diet Coke or Fanta Zero will not be hit with the tax.
What did the leaked paper say?
According to the document obtained earlier this week by broadcaster ARD, ministers proposed that the tax could – in addition to sugary soft drinks – apply to juices, milk drinks, iced teas, oat drinks, ready-made coffee drinks, alcohol-free beer and wine, and even drinks containing artificial sweeteners like diet soda drinks.
A reference in the paper stated that a proposed levy would be added to drinks “containing sugar and/or sweeteners” as well as “granules containing sugar or sweeteners”. Pure milk and 100 percent fruit juices would be exempt.
The proposal suggested taxing such beverages at a rate of 26 cents per litre. For sugary drinks, the levy would be higher, depending on the sugar content.
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However, immediate pushback followed, including from within the government’s Food and Agriculture Ministry. Politicians questioned the motives to expand the tax.
Green Party leader Felix Banaszak told Welt: “My impression is that a measure which we support in principle is now being used simply to plug holes in the budget. And that was never the point of the exercise.”
Hesse state premier Boris Rhein (CDU) said: “At a time when many people are struggling with high prices, the state must not make food and drink even more expensive.”
“I expect a clear rejection of yet another tax that makes food more expensive for our citizens, and a commitment to providing real relief for people in their everyday lives,” he added.
No tax on sugar-free soda drinks
Finance Minister Klingbeil has since ruled out plans to slap an additional tax on sugar-free drinks, saying “it won’t happen”.
Klingbeil posted a photo of himself on Instagram with the words: “Sugar tax on Zero and co? No!”.
Under the post, he wrote: “I believe it is right that we take action against the negative consequences of excessive sugar consumption.
“We must do more to protect children in particular. We are facing a health problem whose consequences have long been placing a strain on our healthcare system.
“That is why we will take action: through public education, but also by taxing sugary drinks. We have decided this within the coalition. The details are currently being finalised.
“What makes no sense is a sugar tax on sugar-free drinks. I won’t do that. It won’t happen.”
German Chancellor Friedrich Merz (back, right) and Finance Minister and Vice Chancellor Lars Klingbeil (front, left) at a two day retreat meeting of the German cabinet. (Photo by Michael Kappeler / POOL / AFP)
Klingbeil explained that experts in the ministries discuss a range of different ideas before political decisions are made.
“Now, a working draft of this sort has appeared in the media,” he said, talking about the leaked document. “It has neither been politically agreed upon nor decided upon within the coalition.
“It is being discussed at a technical level. Such debates are useful and necessary. Ultimately, however, I am the one who decides which bill is tabled.”
He defended his ministry’s internal discussions, saying that staff needed to be free to debate ideas openly and put forward proposals that might ultimately be rejected.
“If every internal consideration is treated as a political decision, this openness becomes more difficult,” he said. “And ultimately, that does not lead to better policymaking.”
What happens next?
The government is planning to introduce a tax on sugary drinks, however, discussions remain on which products will be affected and how much that levy will be.
According to previous estimates, the German government expects the levy to generate around €450 million per year.
If all goes to plan, the law is expected to come into force in 2028.
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