More than 300 drinks companies have spoken out against Germany’s planned sugar tax on beverages in an open letter today (30 June).
Germany is looking to implement a tax on sugary drinks in 2028 as part of wider plans to reform the country’s health insurance system.
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At the end of April, the federal cabinet of Germany’s Ministry of Health approved a draft law that is aiming to prevent increasing healthcare costs in the country.
A copy of the draft law, then seen by Just Drinks, showed the German federal government is planning to bring in a tax on “sugar-sweetened beverages” from 2028.
In a joint open letter, more than 300 businesses, alongside industry associations which includes the German Association of Non-Alcoholic Beverages (WAFG), the Association of the German Fruit Juice Industry (VdF), expressed their concerns around the proposed tax or levy on beverages.
Companies that signed the letter include Coca-Cola, Capri Sun, Carlsberg and Paulaner.
“Introducing a sugar tax would constitute a far-reaching government intervention
with significant economic consequences for our companies,” the letter said.
“Furthermore, a sugar tax would place an extraordinary additional burden on consumers and businesses during these economically challenging times and would deeply interfere with market mechanisms, without any scientifically sound evidence supporting its intended public health benefits.”
Explaining their concerns, the businesses said Germany’s drinks industry is mainly made up of medium-sized enterprises and “hundreds of family-run companies rooted in their regions”.
“These companies have limited financial, human and administrative resources and have already been overburdened in recent years by rising costs for energy, logistics, packaging, and personnel,” the letter said.
It also said recent pressure on consumption and “the crisis in the restaurant industry have further exacerbated the situation” for SMEs.
They added: “Additional burdens from a tax and its operational implementation would severely impact many businesses.”
The tax is expected, according to the draft law, to produce an estimated €450m ($513m) in annual revenue.
According to the drinks companies, “the revenue projected by proponents of a sugar tax appears to be significantly overestimated”, and “the inevitable costs of its collection are underestimated”.
The letter also highlights concerns for consumers, during a period when consumers are said to be facing “already high and further rising prices”.
The companies also stressed the German drinks industry had already taken steps to reduce calories and sugar, “and successfully so”.
They also noted public health issues such as obesity and diet-linked diseases could not be solved through increasing prices.
“Such a tax might partially influence consumption, but it will not achieve a lasting improvement in public health.
“Likewise, this tax cannot solve the structural spending problems of statutory health insurance in Germany,” the letter said.
