They have been blamed for putting up the price of everything from bicycles to garden fences.

Now the Chinese have been dubbed "milk snatchers" by German consumers for buying so much milk that prices of dairy products in Germany are expected to soar by 50%.

The Germans are being made to feel the effect of China's new-found taste for milk, sparked by a remark by China's prime minister Wen Jiabao: "I have a dream - a dream to be able to provide all Chinese, especially our children, with half a litre of milk a day."

The result has been a huge increase in milk consumption in China and demand is growing at a rate of around 25% a year.

Because China has no tradition of dairy farming, there is a shortage of home-produced milk. A third of all the milk produced worldwide is now being transported to China, much of it from the EU and a significant amount from Germany, which produces 27bn litres a year.

EU dairy farmers would like to increase production to cope with a current shortfall, but are prevented from doing so by EU milk quotas, imposed in 1984 and in force until 2015. Instead German dairy farmers have taken the obvious step of putting up their prices, which they have long claimed were artificially low. Blaming the Chinese has helped to deflect criticism from the farmers.

A litre of milk in Germany, currently around 64 cents (40p), is due to go up by 50% in the next few weeks. Other products, such as butter, quark and yoghurt, are expected to rise accordingly. Across Europe the prices of dairy products are rising for the same reasons, but not so dramatically as in Germany, where cheap groceries are seen as a basic right.

Thanks to the lobbying power of Germany's huge number of discount supermarkets, groceries cost around 63% less than in Iceland and 15% less than in Britain.

Now outraged consumer groups and politicians have called for the government to raise unemployment benefit to cover the rise.

Yesterday supermarkets across the country reported that shoppers were panic buying dairy products in an attempt to beat the price increase.

The only effective way to increase global milk yields without breaking the milk quotas, according to experts, is to encourage the breeding of cows outside the EU. German dairy farmers have duly been selling their best high-performance milk cows to Chinese farmers, who are receiving government subsidies if they switch to dairy farming.

· This article was amended on Wednesday August 15 2007. Wen Jiabao is China's prime minister, not the president. This has been corrected.