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1979: Price of milk shoots up
The price of milk is to go up by more than 10% to 15p a pint from the beginning of next month.

The rise is far higher than expected, and means that milk is now three times the price it was five years ago.

Making the announcement, the Agriculture Minister Peter Walker said pre-election delays by his Labour predecessor, John Silkin, were to blame for the size of the increase.

"It's a rise that should have taken place in April," he said. "I inherited a dairy industry whose costs had risen, and producers whose costs had risen also."

I hope it will be as long as possible before we have another adjustment
Peter Walker, Agriculture Minister
Milk distribution costs have risen steeply since April, when 43,000 delivery staff won a pay increase of 15%.

Despite widespread concern over the size of the increase, Mr Walker refused to forecast whether there would be another increase in four months' time when the next price review takes place.

"I want as few increases as possible," he said. "I hope it will be as long as possible before we have another adjustment."

The decision has brought condemnation from consumers and milk producers.

The Consumers' Association said it was "appalled" by the size of the increase, and has written to Mr Walker demanding an independent inquiry into the milk pricing system.

Dairy farmers and milk distributors are preparing for a steep drop in milk sales following the announcement.

Last year, the number of bottles of milk bought slumped by 424 million - and consumers blamed price increases for much of the drop in sales.

Milk is the latest in a long line of products to go up in price since the new Conservative government under Prime Minister Margaret Thatcher took office just three weeks ago.

Petrol is up by 6p a gallon, and bread, gas and electricity have all suffered price rises.

The government is blaming the abolition of the Price Commission, as well as the situation it inherited from the previous administration: but it is finding itself having to handle a public relations setback during the earliest stages of its first term in office.

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Pints of milk
A pint of milk now costs 15p - three times as much as it did five years ago


In Context
Milk prices went up by a further 1.5p seven months later, in December 1979.

Since then, the price of a pint of milk has remained about the same in real terms, although only one in five pints is now delivered to the doorstep.

Farmers, however, are campaigning for a better share of the price of milk. Their cut from the shop price of a pint of milk is about 20% - a fall of about 5% since 1979.

At the same time, the dairy farming industry is in crisis, following the BSE scare in the mid-1980s and the foot-and-mouth epidemic in 2001.

More than 5000 people involved in dairy farming lost their jobs in 1999 alone, and farm incomes have fallen by over 70% since 1995.

The National Farmers' Union has warned that if farmers continue to leave the industry at the current rate, the UK may become unable to meet demand, and will be forced to turn to imports.

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