The Ministry for Primary Industries charged Fonterra for failing to process dairy products in accordance with its risk management programme and because it didn’t notify authorities about the lapse, exported dairy products that failed to meet animal product standards, and failed to notify the ministry’s director-general the product wasn’t fit for purpose.
Judge Peter Hobbs fined Fonterra $60,000 each on three charges and $120,000 for a fourth in the Wellington District Court.
He gave Fonterra a discount for its early guilty plea and for the steps the company took to address the issue.
However, he stepped up the penalty to reflect the company’s size.
Fonterra released results of an operational review into the incident in September, which showed the contamination had occurred at its Hautapu plant in Waikato in May 2012 after workers became concerned a piece of plastic had fallen into a dryer.
Rather than downgrade the product it was decided to reprocess the powder, using a non-standard transfer pipe that was thought to be the source of the contamination.
The incident led to a global recall of the contaminated product.
That initial incident was compounded by a number of un-related events in an unforeseen sequence, chief executive Theo Spierings said at the time.
The contamination was found eventually to be a harmless strain of bacteria.
The contamination scare did little to dent global demand for dairy products, which have driven a surge in New Zealand’s export receipts and helped send the terms of trade to a 40-year high.
