Chancellery halts draft on sweetened beverages

The German Federal Chancellery stopped a draft law on Thursday prepared by Finance Minister and Vice-Chancellor Lars Klingbeil to introduce a tax on sugary drinks. Government circles stated that the proposal deviated from the agreed framework and is not capable of winning a majority in the cabinet in its current form. The Chancellery also objected to procedural aspects, maintaining that coordination between ministries must be formally initiated by the Chancellery rather than by an individual department head. Klingbeil defended the project in television interviews on Friday, expressing confidence that both coalition partners will reach a swift agreement.

“The goal remains clear. We agreed to introduce a sugar tax. We will do that.”

Structure of the proposed tax

The Finance Ministry draft schedules the levy to take effect in July 2027 on soft drinks, including cola and lemonade, containing at least five grams of sugar per 100 milliliters. It establishes three tax brackets: 26 cents per liter for drinks with at least five grams, 32 cents per liter from seven grams, and 38 cents per liter for beverages with ten grams or more. Pure fruit juices and vegetable juices without added sugar are exempt, as are non-alcoholic beer and non-alcoholic wine. The ministry projects annual revenue of around 1.2 billion euros to support statutory health insurance finances.

5g to 6.9g per 100ml26

7g to 9.9g per 100ml32

10g+ per 100ml38

5g to 6.9g per 100ml

26 ct/l

7g to 9.9g per 100ml

32 ct/l

10g+ per 100ml

38 ct/l

Data from the article text

The draft goes beyond earlier guidelines from the Health Finance Commission, which recommended two tax tiers, a ceiling of 32 cents per liter, and estimated lower annual revenues of approximately 450 million euros. Members of the CDU/CSU alliance in parliament expressed opposition to introducing a third tier and higher levies, citing concerns over added financial pressure on consumers and beverage manufacturers.

Presidential intervention in coalition disputes

The confrontation over the sugar tax followed days of conflict over healthcare legislation. On Tuesday, Federal President Frank-Walter Steinmeier telephoned Klingbeil and Interior Minister Alexander Dobrindt because he feared the coalition between the CDU/CSU and SPD could collapse. Steinmeier formed the impression that the dispute could lead to a government crisis after attending the 75th anniversary ceremony of the Federal Constitutional Court in Karlsruhe on Monday, where he spoke with Chancellor Friedrich Merz.

The federal cabinet approved the first stage of the long-term care reform on Wednesday morning after rounds of late negotiations. The SPD had previously threatened to block the care reform proposed by Health Minister Carsten Linnemann. Direct intervention by the federal president in cabinet dispute resolution is highly unusual under German constitutional practice.

Broader policy strains across the cabinet

The governing alliance under Chancellor Friedrich Merz faces internal strain following recent state election results. In early September, the Alternative for Germany fell just short of an absolute majority in Saxony-Anhalt as the governing CDU experienced sharp losses, alongside poor results for both coalition partners in Mecklenburg-Western Pomerania and Berlin. Merz and Klingbeil had previously emphasized their readiness to find compromises during an event held by the Seeheimer Kreis in Magdeburg and an industry appearance at Siemens in Berlin-Spandau.

Tensions have spread to other legislative files, with the Union and SPD clashing over income tax reform and the upcoming pension package. Alexander Schweitzer, the acting SPD leader and parliamentary faction chairman in Rhineland-Palatinate, where the two parties also govern in a coalition, stated that public conflict over health prevention measures offers no lasting advantage to either partner.