The European Commission said it would take Germany to court in January if it has not amended its deposit-and-return scheme.
The countrys 1998 Packaging Law requires drinks manufacturers to place a deposit of up to 50 cents on certain containers. This is refunded when the packaging is returned.
But the law obliges retailers to take back only waste containers of the same type, shape and size as the products they sell.
The Commission believes this makes the containers unattractive to consumers, giving an advantage to producers of reusable containers that are exempt from the law.
As the requirements of long-distance deliveries mean 95% of imported bottles are non-reusable, the law constitutes a barrier to free trade, according to the Commission.
Environment Commissioner Margot Wallström (pictured) said: The Commission has taken a decision of principle to refer Germany to the Court because this is a very serious infringement.
However, we have given Germany a three-month opportunity to meet our concerns before this decision is executed.