Milk prices will rise steeply in the near future, one of Ireland biggest food and dairy firms has warned.
Colin Gordon, ceo of Glanbia Consumer Foods said his company has been absorbing higher costs all year and despite a price last month another hike soon was "inevitable".
Speaking at the annual Costcutter Retailer Conference in Athlone this weekend, Mr Gordon said international supply and demand factors had led to a dramatic rise in raw material costs.
"The simple fact is that despite many years of price stability, milk prices simply have to rise. If we are to continue to service the market and guarantee supply we have no choice but to restore appropriate margins in the processing sector," Mr Gordon said.
Increasing food prices pushed inflation to 4.8 per cent according to figures published last week.
Food prices rose by 1.4 per cent last month - the highest monthly increase since April 2001 - with the price of flour soaring 11 per cent.
Experts have warned that as more land gets used to grow biofuel products, there will be a rise in food costs globally.