The German company Fläminger Liquors, based in Zahna in the former East Germany, has been placed under the control of a Berlin lawyer pending a possible declaration of bankruptcy.

"This is a pre-bankruptcy process and we have three months to devise a strategy to carry on business," said a spokeswoman for the Berlin-based parent company Drinks and Food.

The spokeswoman said there had been no problem with the company's markets but its assets had become heavily mortgaged in connection with the new German spirits tax.

According to the Berlin legal firm, the company, best known for its Fläminger Jagd herbal liquor, will need a "tax renunciation" if it is to avoid bankruptcy with the loss of 200 jobs in September. The proposed tax waiver is supported by the Magdeburg regional government but has so far been refused by the federal ministry.