The Spanischer Paprika Mix with the batch, or los number L-01-05 TUTW, sold in shops in North Rhine-Westphalia and Lower Saxony between January 10 and 13 should not be used, Lidl announced on Saturday.
The consumer protection ministry in Baden-Württemberg said it could not rule out the possibility that the contaminated peppers could be sold by other companies than Lidl and in other states.
Official examinations have been launched, the results of which should be available at the end of next week.
Lidl said it had cleared its shops of all the produce concerned. It said the contaminant, growth regulator ethephon, is damaging to human health if left on food at too high levels and can be an irritant to skin.