Australians should prepare to fork out more for dairy products, Bega Cheese’s executive chairman has warned, as ongoing COVID-19 disruption threatens to take another multi-million dollar slice out of its profits in the second half of the financial year.

The ASX-listed dairy giant’s profits jumped by 29 per cent to $28 million in the six months to 26 December 2021, but revealed COVID-related costs had blown out to more than $20 million.

Bega Cheese executive chairman Barry Irvin said higher input costs around grains, fuel and energy - exacerbated by Russia-Ukraine tensions - combined with “really strong” global commodity prices for milk would see these various costs passed onto consumers.

“Across the industry - virtually everybody, whether retail or companies like ours … people are talking about food inflation. It’s the subject on everybody’s lips at the moment,” he told this masthead.

“Once those farmgate milk prices go up, it impacts whatever you can think of that is made with dairy.”

Just about every item under Bega’s portfolio would be affected, with the only potential exception being non-dairy spreads such as honey, he added. “There would be the need for price increases.”

Popular brands under Bega Cheese’s portfolio include Dairy Farmers and Pura milk, Dare iced coffees, Yoplait yoghurts, Vegemite, juices such as Daily Juice Co, Mildura, and The Juice Brothers, alternative milks from Vitasoy, and Zooper Dooper.

Mr Irvin is the latest executive from the food, beverage and retail sector to warn about food inflation, which he described as “permanent” key challenge for businesses. Woolworths chief Brad Banducci yesterday said inflation was a “live and real issue” and that his supermarkets were seeing 2-3 per cent price rises.

Mr Banducci’s comments follow those from Coles boss Steven Cain, who said he was preparing for the worst across-the-board inflation in “quite some time”.