Fonterra Fined For Damaging New Zealand's Reputation Over Botulism Scare

New Zealand-based dairy giant Fonterra has been fined for food safety violations and damage caused to the country's diary industry due to the food safety scare in 2013.

The company, which is the world's largest exporter of dairy products, has been fined NZ$300,000 ($256,675, £154,748, €186,419) by Judge Peter Hobbs in a district court in Wellington.

In March, the company admitted four food safety violations in the way it handled possible contamination of several products with a bacteria that might cause botulism.

"New Zealand's reputation for high-quality, safe dairy products was shaken, as was confidence in New Zealand's overall food-safety regulatory scheme," Australian media quoted Judge Peter Hobbs as saying.

"Access to a number of foreign markets was impacted. There have inevitably been downstream financial implications for those involved in the supply of dairy products associated with Fonterra."

He accepted the fact that the scare resulted from carelessness and failure to follow procedure, rather than any deliberate action, but said the company could and should have done better.

The company had been facing a combined maximum penalty of NZ$500,000 for the charges. However, the amount was reduced in light of the company's guilty plea and co-operation with authorities.

Fonterra said it is not contesting the fines.

"Fonterra had already accepted responsibility for the allegations made in the charges, and we respect the sentencing decision made today," spokeswoman Maury Leyland said.

In August last year, Fonterra had found that a whey-protein concentrate in some of its products contained a strain of bacteria that could cause botulism, a disease leading to severe food poisoning. The food safety scare turned out to be a false alarm after further tests.

However, it forced many companies who use Fonterra ingredients to recall their products. One of the companies, France's Danone announced a lawsuit against Fonterra for compensation over the wide-ranging recall.

In addition, several countries including China announced a temporary ban on some New Zealand products, a severe blow to the reputations of the country's dairy sector.