Andrea Schultz, an Austrian who opened her Cardinal's Hat bierkeller in Worcester two months ago, sells beer brewed in Salzburg in traditional earthenware one-litre jars.
However, local trading standards officers have told her she could be prosecuted, because draught beer in Britain must be sold by the pint.
Schultz said she was "stunned" when she received a letter telling her she was breaking the law, adding: "It's crazy." She says the beer, tastes better in the traditional flutes because the tops are "not so wide and keep in the flavour".
A trading standards spokesman said: "Free-flowing beer must be sold by the pint and that measure is here to stay. The only other items which are allowed to be sold in pints are milk and orange juice which is delivered to the doorstep."