Bega Cheese has for the first time exceeded $2 billion in revenue after completing the acquisition of Lion Dairy and Drinks.

The company's 2020-21 results released on Friday showed normalised profits increased 24 per cent to $39 million and revenue was more than $2.07 billion, up 39 per cent compared to last year.

The $528 million acquisition of Lion Dairy and Drinks has seen the company effectively double in size — employee numbers have jumped from approximately 2,050 to 4,150.

Executive chairman Barry Irvin said he was pleased with the result.

However, Mr Irvin said COVID-19 and lockdowns had affected the infant formula, food service and convenience channels.

"There has been a structural change in the sales of infant formula market, and we've looked to manage the impact of that on our nutritional businesses," he said.

"Recent lockdowns have seen a negative performance in the food service and convenience business but we expect that to be offset by sales in retail and other areas."

Competition for milk continues

Chief executive Paul Van Heerwaarden confirmed Bega Cheese had faced challenges managing milk supply in a very competitive market.

"While we increased our milk intake through the [Lion] acquisition, we lost some milk supply in Victoria due to the end of the two-year Koroit supply guarantee with Saputo, strong competition for milk, and supplier exits due to retirements and alternative land use," Mr Van Heerwaarden said.

Mr Irvin said he was hopeful a strong farm-gate milk price would encourage farmers to increase supply.

"In some cases competition for milk has seen [the price] be in excess of the returns from those product streams," he said.

"But from my perspective, seeing a good season and prices that improve optimism on-farm —  that's good for the industry.

"So let's hope we see some more growth this year in supply."