German packaging deposit row flares again

Mineral water firm threatens legal action against the government while supermarket considers flouting the law

The hot dispute over Germany's deposits on one-way drinks containers continues to escalate despite Friday's parliamentary approval of legislation aimed at cooling the dispute.

Following last week's European court of justice ruling that Germany's existing rules have discriminated against foreign mineral water producers, French firm Dannone has said that it will sue the government for damages. Sales of French mineral waters in Germany fell 85% after the deposits took effect in January 2003.

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