The European Commission has warned Germany that it must change its controversial packaging laws or face the possibility of being taken to the European Court of Justice.

The EC said in a statement that it has decided to send Germany a formal request to change the rules in its packaging law ("Verpackungsverordnung") on the deposit and return of one-way packaging (typically cans and plastic bottles).

The Commission said it saw the environmental benefit of charging a deposit and of taking back packaging, but it believes that the way in which the deposit and return systems function in Germany constitutes a disproportionate barrier to importers from other EU countries.

Internal market commissioner Frits Bolkestein said: "We have held a number of high-level discussions with the German authorities in an attempt to resolve this case consensually. Insufficient progress has been made to satisfy the Commission that the German system would no longer be in breach of EU rules that Germany and all other Member States have agreed. The Commission now has no alternative but to proceed with the case, although we continue to hope that a solution can yet be achieved which would avoid us having to refer this case to the European Court of Justice"

Under the German "Verpackungsverordnung" (law on packaging) a mandatory deposit of at least €0.25 or €0.50 (depending on the volume of the product) is being charged on mineral waters, beer and sparkling soft drinks sold in one-way packaging (typically, cans and plastic bottles). At the same time, retailers are obliged to accept the return of used packaging of the same type, shape and size as the packaging they carry in their own product range.