Germany's sugar tax sparks 'nanny state' debate

The German government's decision to introduce a levy on sugary drinks as part of its health care reform package has triggered a new debate on government interference in diets — even though many countries around the world have already introduced such a tax.

The levy, which would only be introduced at the beginning of 2028 to give producers time to prepare, would bring in €450 million (ca. $530 million) a year, according to the German Health Ministry. This would not be folded into the federal budget, but reserved for investment in the health care system.

Though the exact details of the levy are not in the ministry's draft health care reform law, a panel of experts who released a series of proposals in March suggested a tiered levy:

• Drinks with less than 5 grams (0.17 ounces) of sugar per 100 milliliters — tax-free.
• Drinks with 5-8 gr per 100 ml: Levy — 26 euro-cents per liter
• Drinks with more than 8 gr per 100 ml: Levy — 32 euro-cents per liter

Does a sugar tax make sense?

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Health Minister Nina Warken, of the conservative Christian Democratic Union (CDU), has said she is in favor of such a measure, though she admitted that the government still had to discuss the details — and that ultimately it was up to the Finance Ministry to decide fiscal policy anyway.

Some members of her party have already voiced concern — there was a heated debate on the issue at the CDU conference in February, where many politicians expressed fears it would make the government look paternalistic.

Doctors and nutritionists united in support

But for Germany's doctors and nutritionists, such a measure is more or less a no-brainer. Peter Philipsborn, chair of public health nutrition at Bayreuth University, said that more than 100 countries worldwide had introduced sugar taxes on drinks, and studies had shown that they are beneficial.

"Overall, the evidence is quite clear that such taxes reduce consumption of sugary beverages," he told DW. "And we know from many other studies that regular consumption of sugar-sweetened beverages leads to weight gain and to increased risk of obesity and associated diseases such as diabetes and cardiovascular disease."

Research has also shown that Germans consume more sugar via soft drinks than people in any of the 10 most populous countries in western Europe: According to a study released in February by the consumer protection organization Foodwatch, Germans drink nearly 26 grams of sugar each per day — more than they eat in the form of chocolate and candy (20 grams).

In the UK, by contrast, where a tiered sugar levy was introduced in 2018, people only consume 16 grams each per day. The example of the UK also showed that drinks companies responded to the levy not by raising prices, but by cutting the amount of sugar in their beverages. By 2019, there was a 35% reduction in the amount of sugar in UK soft drinks, Foodwatch said.

Our sweet, sweet world

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Drinks businesses: Not convinced by sugar tax

But the food and drinks industry does not appear to be convinced by these figures at all. Some point out that, despite the levy, the prevalence of childhood obesity is still higher in the UK than in Germany.

Manon Struck-Pacyna, spokesperson for the Food Federation Germany, which represents some 250 food and drink companies, said the sugar levies in other countries may have only led to a shift in consumption to other sugary foods.

"This is the so-called substitution effect," she told DW. "That means we're introducing something under the cover of health prevention, but it doesn't necessarily make a difference, because it hasn't shown that people are becoming slimmer than elsewhere."

But it's unclear whether such a substitution effect really exists: A statement from April this year in support of a sugar levy signed by several dozen German food scientists and public health organizations, including Peter Philipsborn, said that studies on the issue found there was no evidence that a sugar levy had led to a rise in consumption of other sugary foods.

Health care in Germany: Inside a system at breaking point

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A burden for businesses?

Nevertheless, Struck-Pacyna argued that despite these numbers, a sugar levy would inevitably lead to higher costs for consumers, at least in the short-term.

"On top of the tax, there are higher bureaucratic expenses for the companies," she said. "That means they have to look at all the drinks in their portfolio, and work out how much sugar is in each one and in which category it falls. That means a lot of working hours, and those too are costs that would be passed on."

This would, Struck-Pacyna argued, be particularly detrimental to small and medium-sized companies "that might only have one signature drink." "If that suddenly tastes different, then they have a problem — they could easily disappear from the market," she said.

A tax on the poor?

Another criticism, leveled by some in Germany this week, is that a sugar tax disproportionately affects low-income households, which spend a bigger proportion of their budgets on food and generally more on sugary drinks.

But Philipsborn is convinced that the health benefits for low-income households more than make up for those concerns. "The overall tax burden of a sugar tax is still quite low: On average, a few euros per household per year. It doesn't make a really big difference," he said. "What is even more important when considering the social effects of taxes is not just who pays the tax, but who benefits from the tax revenue."

When it comes to a sugar tax, that would be poorer people, he argued: Even if they end up paying a little more in tax, poorer people are most likely to reap the health benefits, given that they are the ones who suffer disproportionately from diseases related to high sugar consumption. In other words, a sugar tax actually leads to greater social equality, he argued.

Still, both sides of the argument do agree that sugar levies on their own are not enough. As Philipsborn put it, effective public health policy requires a bundle of measures to really decrease obesity in the long-term, including healthier meals 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 has to pass through parliament — where the political debate is likely to continue.

Edited by: Rina Goldenberg