The German government’s decision to impose a levy on sugary drinks as part of its health care reform package has sparked a new debate over government intervention in diet – even though many countries around the world have already implemented such a tax.
According to the German Health Ministry, the levy, which will only be implemented in early 2028 to give producers time to prepare, will bring in €450 million (about $530 million) per year. It will not be included in the federal budget, but will be reserved for investment in the health care system.
Although the exact details of the levy are not in the ministry’s draft health care reform law, a panel of experts issuing a series of proposals in March suggested a tiered levy:
- Drinks containing less than 5 grams (0.17 oz) of sugar per 100 ml – tax-free.
- Drinks containing 5-8 grams per 100 ml: Levy – 26 euro cents per liter
- Drinks containing more than 8 grams per 100 ml: Levy – 32 euro cents per litre.
Health Minister Nina Warken, of the conservative Christian Democratic Union (CDU), has said she is in favor of such a measure, although she acknowledged that the government still has to discuss the details – and it is ultimately up to the Finance Ministry to decide fiscal policy.
Some members of his party have already expressed concerns – the issue was hotly debated at the CDU conference in February, where many politicians expressed fears it would make the government look paternalistic.
Doctors and nutritionists unite in support
But for Germany’s doctors and nutritionists, such a solution is by no means an easy task. Peter Philipsborn, chair of public health nutrition at the University of Bayreuth, said more than 100 countries around the world have imposed sugar taxes on beverages, and studies have shown they are beneficial.
“Overall, the evidence is quite clear that such taxes reduce consumption of sweetened beverages,” he told DW. “And we know from many other studies that regular consumption of sugar-sweetened beverages leads to weight gain and increases the risk of obesity and related diseases like diabetes and heart disease.”
Research also shows that Germans consume more sugar through soft drinks than people in any of the 10 most populous countries in Western Europe: According to a study published in February by the consumer protection organization Foodwatch, Germans drink about 26 grams of sugar per day – half of what they eat in the form of chocolate and candy (20 grams).
In contrast, in the UK, where a tiered sugar levy was introduced in 2018, people consume only 16 grams of sugar per day. The UK example also showed that drinks companies responded to the levy not by raising prices, but by cutting the amount of sugar in their beverages. Foodwatch said that by 2019 the amount of sugar in UK soft drinks had decreased by 35%.
Beverage business: Disagree with sugar tax
But the food and beverage industry does not seem at all convinced by these figures. Some say that, despite the levy, the prevalence of childhood obesity in Britain is still higher than in Germany.
Manon Struck-Sweat, spokeswoman for the Food Federation Germany, which represents about 250 food and beverage companies, said sugar levies in other countries have led to a shift in consumption toward foods containing other sugars.
“This is the so-called substitution effect,” he told DW. “It means we’re offering something under the guise of health prevention, but it doesn’t matter, because it doesn’t show that people are getting thinner than elsewhere.”
But it is not clear whether such a substitution effect actually exists: A statement in support of the sugar levy from April this year, signed by several dozen German food scientists and public health organizations, including Peter Philipsborn, said that studies on the issue showed that there is no evidence that the sugar levy caused an increase in the consumption of other sugary foods.
A burden to businesses?
Nevertheless, Struck-Sweat argued that despite these figures, the sugar levy will inevitably lead to higher costs for consumers, at least in the short term.
“Apart from taxes, there are also high bureaucratic expenses for companies,” he said. “That means they have to look at all the beverages in their portfolio, and figure out how much sugar is in each and what category it falls into. That means a lot of work hours, and that’s also a cost that will be passed onto them.”
Struck-Sweat argued, this would be particularly harmful to small and medium-sized companies “who may only have one signature drink.” “If their taste suddenly becomes different, they have a problem – they could easily disappear from the market,” he said.
Tax on the poor?
Another criticism raised by some in Germany this week is that the sugar tax disproportionately affects low-income families, who spend a larger share of their budgets on food and generally more on sugary drinks.
But Phillipsborn believes the health benefits for low-income families more than outweigh those concerns. “The total tax burden of the sugar tax is still quite low: on average, a few euros per year per household. It doesn’t really make a big difference,” he said. “What is even more important when considering the social impacts of taxes is not who pays the tax, but who benefits from the tax revenue.”
When it comes to the sugar tax, poor people will be the ones to blame, he argued: even if they pay slightly more in taxes, poor people are most likely to receive health benefits, given that they are the ones who disproportionately suffer from diseases related to high sugar consumption. In other words, the sugar tax actually leads to greater social equality, he argued.
Still, both sides of the argument agree that the tariffs imposed on sugar are not high enough. As Phillipsborn said, effective public health policy requires a number of measures to reduce obesity in the long term, including healthy food in schools and kindergartens, measures to protect children from junk food advertising, better catering in workplace canteens, and lower taxes on healthy foods.
As things stand, Germany’s sugar levy still needs to pass parliament – where political debate is likely to continue.
Edited by: Reena Goldenberg