Sources: Germany halts draft law for sugar levy on beverages

The German chancellery has stopped a draft law presented by Finance Minister Lars Klingbeil on the introduction of a sugar levy on beverages, dpa learnt from government sources on Thursday.

The sources said that the draft differs from the proposal put forward by the health finance committee and "in its current form, is unlikely to secure a majority within the government." 

The Finance Ministry initially didn't respond to a request for comment. 

It comes after Klingbeil, whose Social Democrats (SPD) are the junior partner in the coalition led by conservative Chancellor Friedrich Merz, sent his plans to the ministries for consultation on Wednesday. 

The levy has faced strong headwinds from the conservative parliamentary bloc and some of Germany's federal states, with Hesse state premier Boris Rhein from Merz's Christian Democrats (CDU) describing the plans as a burden for local beverage makers.

Under Klingbeil's plans, the levy is to apply to all beverages with a sugar content of 5 grams per 100 millilitres.

Beverages containing sweetener instead of sugar would not be taxed, with pure fruit and vegetable juices as well as non-alcoholic beer and wine also to be exempt.

The amount of the levy is to be based on the sugar content and range between 26 and 38 cents per litre.

According to the draft law, the tax is to come into force on July 1, 2027, with the Finance Ministry forecasting about €1 billion in additional tax revenue per year.