German government strikes deal to tax sugary drinks

Beverage industry groups have criticized the tax, with the German Brewers' Association calling it "a burden on both consumers and businesses."(AFP) — The German government on Wednesday approved a plan to tax sugary drinks, ending the latest dispute to hit Chancellor Friedrich Merz’s uneasy coalition.The sugar tax aims to provide funds for the public health care system and help “protect health, particularly of children and adolescents,” according to the Finance Ministry.Some of Merz’s center-right conservatives had opposed the tax, which was being pushed by the center-left Social Democrats, the junior partners in his government.The Cabinet approved draft legislation Wednesday that will now be sent to parliament.If approved, it would take effect July 1, 2027.The tax would apply to sodas, energy drinks, lemonades, iced teas, sweetened fruit juices and juice concentrates with added sugar — but not to nonalcoholic beers or wines or pure fruit or vegetable juices.A tax of 0.26 euros (29 cents) per liter would apply to drinks containing at least 5 grams of sugar per 100 milliliters, with a higher rate of 0.32 euros for drinks containing more than 8 grams per 100 milliliters.The rates are lower than those proposed last week by Vice Chancellor Lars Klingbeil of the Social Democrats.His initial proposal sparked an outcry from the right that threatened to derail the tax altogether.The compromise announced Wednesday is expected to generate an additional 690 million euros in revenue next year, rising to 925 million euros in 2028 and up to 890 million euros annually in subsequent years.Beverage industry groups have criticized the tax, with the German Brewers’ Association calling it “a burden on both consumers and businesses.”Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads