On July 10, the Bundestag officially passed a comprehensive health savings package. As part of this decision, the coalition government committed via a parliamentary resolution to introduce a new sugar tax and a significant increase in spirits taxes starting January 1, 2027. While the final legal texts for the levies will be formulated in autumn 2026, the legislative process moved forward today after the Bundesverfassungsgericht rejected an urgent appeal by the opposition, who attempted to halt the vote due to the unusually short preparation time.
The planned soft drink tax is modeled after the UK's tiered system. Beverages containing less than 5 grams of sugar per 100 milliliters (0.001 hl) will remain tax-free. Drinks with 5 to 8 grams of sugar per 100 milliliters (0.001 hl) will face a levy of EUR 26 per hl, while products exceeding the 8-gram threshold will be taxed at EUR 32 per hl. Pure fruit juices and artificially sweetened beverages are completely exempt. The government anticipates this measure will generate between EUR 450 million and EUR 650 million annually for the statutory health insurance system.
The rapid timeline has sparked fierce opposition from the beverage industry. Soft drink market leader Coca-Cola, alongside Capri Sun, Carlsberg, and Paulaner, among others, signed a formal protest letter to policymakers and strongly criticized the accelerated procedure. They argue that complex logistical and recipe adjustments cannot be executed by 2027, and warn that exempting artificial sweeteners will merely force a massive substitution towards controversial sugar replacements rather than holistically improving consumer diets. The brewing industry, which faced a major decline in beer consumption in recent years and just started to extend its reach into the soft drink sector, sees another major pushback. This is best exemplified by the Munich-based Paulaner brewery, which successfully expanded in this market with its product Spezi (inside.beer, 2025-10-08) and already sells around 3 million hl of the brand per year, accounting for about half of the Munich brewery's total production volume.
In tandem with the sugar levy, Federal Finance Minister Lars Klingbeil plans to raise the spirits tax by 20 percent. The levy on pure alcohol will increase from EUR 1,303 to EUR 1,564 per hl, making a standard 0.7-liter (0.007 hl) bottle of 40 percent ABV vodka approximately EUR 1 more expensive. The hike also applies to sparkling wines, fortified wines, and alcopops. However, in a crucial decision for the broader alcohol sector, both regular beer and still wine will remain exempt from these tax increases. The finance ministry expects the spirits tax hike to deliver an additional EUR 455 million annually.
Representatives of the spirits sector strongly dispute the government's revenue projections. Angelika Wiesgen-Pick, managing director of the Bundesverband der Deutschen Spirituosen-Industrie und -Importeure, argued that the expected financial gains are unrealistic. Pointing to long-standing volume declines of about 1 percent per year, major producers like Diageo warn that the additional price burden will accelerate volume losses and inevitably shift consumer demand toward the untaxed beer and wine segments.
