The controversial packaging laws in German that have established mandatory deposits on non-refillable bottles and cans of beer and soft drinks may be the subject of EU legal action.

The Wall Street Journal reported today that the EU may sue Germany over the deposit system because it violates EU cross-border trade regulations. The Journal cited recommendations by Frits Bolkestein, Europe's commissioner for internal markets.

Germany argues that the rules are there to encourage recycling and protect the environment.

However, opponents outside Germany argue that they protect German bottle manufacturers, because foreign drink makers cannot afford to produce packaging especially for the German market.