The European Commission has said that it may initiate legal action against Germany for the way it has phased in a compulsory system of deposits on drinks containers, a Commission spokesman has announced.

The Commission said it is not taking issue with the deposit system per se but believes the manner in which the system is being gradually phased in, before full implementation at the beginning of October, discriminates against imported products and therefore limits the free movement of goods protected under EU law.

The action, which could be initiated as early as Wednesday next week, is likely to be in the form of an infringement procedure and could be launched as soon as next Wednesday. Under EU rules, Germany would have two months to respond to the Commission before further proceedings might be triggered.