Beverage companies bite back at Germany’s 2028 sugar drink tax amid rising diabetes rates

Over 300 German beverage companies are opposing the government’s introduction of a sugar tax or levy on drinks, the implementation of which is planned for 2028. In an open letter to industry associations, they are appealing to policymakers to stop adding burdens on businesses and consumers. 

According to the research institute Global Health Hub Germany, the number of people diagnosed with diabetes has risen from 5.8% to 10.3% between 2003 and 2024. It flags that Germans consume more sugar from soft drinks than those of the 10 most populous countries in Western Europe. This amount comes up to 26 g daily compared to 16 g in the UK. 

However, in the letter, the businesses underscore that the German market is mostly comprised of medium-sized businesses, including hundreds of regionally rooted family companies. They are already burdened by recent energy, logistics, packaging, and personnel costs. 

Moreover, the companies point out that the impacts of reduced consumer spending and the crisis in the restaurant and hospitality sectors are further adding pressure.

Structural progress vs. purchasing power

The German federal cabinet approved the tiered levy on sugar-sweetened beverages this April, which is expected to generate around €450 million (~US$515 million) annually — an amount usually reserved for the statutory health insurance system.

By 2028, nearly half of all EU countries will have implemented a sugar tax — Germany would be a late adopter.The Global Health Hub points to a recent Lancet Public Health analysis indicating that Germany has been prioritizing “expensive repair medicine over structural prevention.”

Concerns about the sugar tax are not limited to business impacts but also consumers, the letter underscores. The signatories point out that low-income households would especially face burdens since food prices are already high. An additional price increase would weaken the purchasing power of consumers, they argue.

Fiscal agenda intersects

Germany’s sugar tax has not arisen from a national prevention agenda, notes the Global Health Hub, but rather from a fiscal response to a €15 billion (~US$17 billion) deficit in the statutory health insurance system. 

The debate over the levy is driven by health finance ministers. The tax is being discussed to help cover health insurance system contributions for recipients of unemployment and basic income benefits.

The researcher adds that Germany’s proposed tiered structure aims to encourage industry reformulation, similar to the UK’s 35% sugar reduction.

However, the signatories of the letter are doubtful about the public health effectiveness of a sugar tax since such measures are based on calculations and assume an effect without proof. The beverage industry states that evidence of a sugar tax is lacking.

Global health movement

The WHO has previously pointed out that the taxes on alcoholic and sugar-sweetened beverages are lacking as prices of unhealthy drinks continue to drop in most countries. It urged that combining taxes with subsidies for healthier foods can improve affordability, especially for low-income households, while also generating revenue for public health.

Mexico's 2014 sugar tax led to a 6% drop in sugary drink purchases in its first year, despite strong industry opposition.The Global Health Hub points out that Germany has joined a global health wave. Norway introduced a sugar-sweetened beverage tax in 2009, France in 2012, and the UK in 2018. Germany, being the largest sugar consumer in the EU, will be a late adopter since by 2028, nearly half of the EU countries will have implemented a sugar tax, the researcher adds.

Latin America has been implementing sugary drink taxes for over a decade, with Mexico being the first to implement the tax in 2014, according to the Global Health Hub. It underscores that the country saw a 6% decline in sugar drink purchases in the first year despite industry pushback. As a result, a study found decreases in overweight risk among adolescents in areas where there were significant price hikes.

Researchers recently found that sugar-sweetened beverage tax legislation has risen globally, with South Asia leading in adoption. The team linked the prevalence of type 2 diabetes and obesity in a country to tax adoption policies rather than sugary beverage consumption rates. 

On the other hand, the signatories of the letter point out that the industry has already made progress in reducing sugar, with official surveys showing a 15% decrease in soft drink consumption since 2018.

The initiative was driven by companies through reformulating existing recipes and expanding reduced-calorie or zero-calorie products. The industry stakeholders believe that a sugar tax will not solve the complex cause of obesity and diet-related diseases, nor will it be a sustainable contribution to stabilizing the statutory health insurance.

They further argue that the levy would be politically symbolic, causing economic and bureaucratic burdens.

Previous research found a solution to prevent extra grocery costs by removing VAT on fruits, vegetables, legumes, and whole grains while taxing meat and sugary drinks.

The Global Health Hub stresses, “Germany’s sugar tax is the right measure. It is backed by strong evidence, by civil society, and by 60% of the German public. It reflects years of advocacy by the public health community, including the non-communicable disease community of the Global Health Hub Germany.”

“But a single levy is not a prevention strategy. The Americas — from Mexico’s pioneering 2014 tax to Brazil’s 2025 reform — show both what is possible when political will meets public health evidence and what is lost when it does not. With over 130 jurisdictions having acted on sugar-sweetened beverage taxation, the question for Germany is not whether to move. It is whether this first step becomes the foundation of a comprehensive, long-term noncommunicable disease prevention strategy.”

Recent observational research looking at Chile as an example linked coordinated food policies targeting products high in fat, salt, and sugar in the country to a significant reduction in childhood obesity. Such policies include front-of-package warning labels, marketing restrictions, and school food regulations.