The German government ordered the country's retail and trade associations to attend a "euro conference" in Berlin yesterday to discuss growing consumer anger at perceived price-gouging since the introduction of the euro in January.

Yesterday's conference, held by Ms Renate Künast, German Consumer Protection and Agriculture Minister, was a change in tune for the government, which until recently denied there had been any noticeable price rises. Now even Chancellor Schröder said he has felt the pinch.

"I recommend punishing people with a boycott if they push up euro prices. The government relied on self-regulation and that has been taken advantage of," said Mr Schröder.

Yesterday's conference was an admission that this self-regulation policy has failed but the government is anxious to reach a consensus with retailers rather than introduce legal measures.

Unsurprisingly, retailers rejected allegations they are gouging their customers yesterday.

"You cannot punish a whole industry for the behaviour of a few black sheep," said Mr Hermann Franzen, president of Germany's independent retailer association.

The first government minister to admit in public that prices had risen was someone who should know, the finance minister Mr Hans Eichel. He spoke out after being overcharged for a lunchtime sandwich.

"I don't buy where I feel cheated. And if we all act like that then things will settle down again," said Mr Eichel.

The trouble for German consumers is trying to find somewhere to shop where prices haven't gone up. They have dubbed the euro "teuro", a pun on the German word teuer, which means expensive. The exchange rate of almost exactly two deutschmarks to the euro has made it easy for them to notice hidden price rises.

Bild newspaper, Germany's equivalent of the Sun, was unusually slow to react to consumer anger but last week it set up a campaign for lower prices lead by its own "Euro Sheriff".

The most blatant price rises have been for fresh fruit and vegetables, with tomatoes jumping in price by nearly 52 per cent. Cauliflower is a third more expensive and onions a fifth costlier. Vegetable suppliers blame the price rise on cold weather in southern Europe.

Another trick has been to change the old deutschmark price into euro, a favourite in car parks.

Hundreds of products have risen by between 5 and 10 per cent, spotted by price conscious shoppers in Germany, the country that gave us Aldi and Lidl supermarkets. Milk is 10 per cent more expensive, cheese has gone up 6 per cent, even electricity is 4 per cent more expensive than before Christmas.

"I was very positive about the euro in January but now I am very disappointed, particularly by the price rises in restaurants," said Mr Mikolaj Ciechanowicz, a 24-year-old student.

Despite the price rises, German inflation fell to a three-year low of 1.2 per cent in May, according to the basket of 750 products and services checked by the government. This is because of heavier weightings for items like rent and heating, which hardly rose, and less for items such as eating out.