Lactalis, the world's largest dairy company, said the Iran war had blocked shipments, delayed sales and would lead to higher consumer prices as supply-chain disruptions drive up costs for energy, transport and packaging across its global operations.
The conflict has forced the group to reroute cargoes away from the Strait of Hormuz, a critical chokepoint for global trade, while some perishable shipments risk spoiling at sea, underscoring how the war is rippling through food supply chains and threatens to push up grocery bills for consumers worldwide.
"We'll need to pass these costs on to our clients. This will be the key issue in 2026," Lactalis chairman Emmanuel Besnier said during the company's results presentation.
The increase in prices of Lactalis' products, which include brands such as President, Galbani and Lactel, would be of "a few percents", Besnier said, but far below the 20-25 per cent rise it had passed on in 2022-2023 in the wake of the energy crisis after Russia's invasion of Ukraine.
World food prices hit a six-month high in March and were set to continue rising, the United Nations Food and Agriculture Organisation said.
Several cargoes carrying fresh Lactalis products such as butter and cream were blocked at sea or in ports due to the near closure of the Strait of Hormuz and risk being lost if expiry dates are exceeded, Besnier told Reuters.
Lactalis, the world's ninth-largest food group, is trying to divert shipments but faces a spike in demand for alternative transport and a surge in maritime rates, he said.
The family-owned company's revenue reached €31.2 billion (£27.19bn) in 2025, up 2.9 per cent from 2024, while net profit rose to €528 million, or 1.7 per cent of sales, from €359 million a year earlier.
Sales were negatively affected by the high rate of the euro, notably against the dollar and the Brazilian real.
Founded in 1933, the group has grown into a global dairy powerhouse with operations spanning cheese, milk, yogurt, butter, cream and infant nutrition.
Lactalis purchased General Mills' yogurt business in the U.S. last year, including brands such as Yoplait, allowing it to become the third-largest player on the U.S. fresh dairy market. The Americas' sales topped €10 billion for the first time last year.
Earlier this month, Lactalis closed the acquisition of Fonterra's global consumer business for NZ$4.22 billion (£1.84bn), which should enable it to double activities in Asia and Oceania.
Acquisitions pushed debt to a three-year high of €6.3 billion in 2025 and will continue to weigh in 2026, limiting appetite for other takeovers in 2027, Besnier said.
(Reuters)