Germany's sugar tax plan faces political backlash over revenue focus

Germany's government is trying to pass a sugar tax, and it's running into trouble from unexpected places. The proposal, which would levy charges on sugary and artificially sweetened drinks, has drawn criticism from both the Green Party and the conservative Christian Democrats—parties that sit together in Chancellor Friedrich Merz's coalition. The fight isn't really about whether sugar is bad for you. It's about what the tax is actually for.

Green Party co-leader Felix Banaszak supports the idea of taxing sugar in principle. That's what you'd expect from the Greens. But he's worried the government is using the tax as a budget fix rather than a genuine health measure. "My impression is that an instrument we fundamentally support is now simply being used to plug budget holes," he told Welt TV. He's concerned that treating it mainly as a revenue-raising tool could damage public support for the policy down the line. The Greens originally backed sugar taxes because they reduce consumption of unhealthy drinks and save the health system money. If it becomes just another way to squeeze money from citizens, that logic falls apart.

The criticism from the right is sharper. Hesse's State Premier Boris Rhein, a CDU politician, wants the plan dropped entirely. His argument is straightforward: people are already struggling with high prices. Adding costs to food and drinks makes their lives harder. Rhein says the government should focus instead on lowering energy prices, cutting social security contributions, and easing the everyday burden on households. Other CDU lawmakers have also raised objections to how broad the tax would be. The Agriculture Ministry, too, has expressed reservations.

A leaked Finance Ministry document shows just how wide the net could be cast. The tax wouldn't just hit soft drinks. It could apply to juices, milk-based drinks, iced tea, beer-based mixed drinks, oat and soya drinks, ready-made coffee drinks, and alcohol-free beer and wine. The draft even floated taxing zero-calorie and light drinks with artificial sweeteners. Finance Minister Lars Klingbeil quickly shut that down on Instagram, saying it made no sense to tax sugar-free drinks. He emphasized that the leaked paper was only an internal working document—nothing had been politically agreed or approved by the coalition yet. The final scope of any tax remains unsettled.

Consumer groups and the advocacy organization Foodwatch support the tax. The food and beverage industry, predictably, opposes it strongly. But the real problem for the government is that its own coalition partners are divided on what the tax is supposed to accomplish. One side sees a public health tool. The other sees a regressive charge on ordinary people. And the government appears to be using it primarily to raise revenue—which satisfies neither camp.

This fight is happening as Chancellor Merz and his Cabinet are meeting at Neuhardenberg Castle in Brandenburg to discuss broader economic reforms. The government is trying to modernize the economy, push artificial intelligence development, and steer Germany out of three years of recession. The sugar tax was supposed to be part of that package. Instead, it's become a symbol of the tensions within the coalition—between fiscal necessity and political principle, between health policy and cost-of-living concerns. Whether the tax survives depends on whether Merz can find a version that his partners can actually agree on.