which character best exemplifies the theme of prejudice?

Certainly the Nazis demonstrate prejudice throughout the novel. Lieutenant Kotler is espcially vehement about his prejudice against Jews and a list of people he doesn't like. I think Kotler would be the best character that you are looking for. He attempts to keep his hatred under control around Bruno's family but it is not hard for it to come out. Consider Kotler's violent actions towards Pavel for spilling wine.