Fonterra fined by New Zealand court over botulism food scare

The Fonterra Te Rapa plant is seen behind a sign board for cyclists near Hamilton, August 6, 2013. REUTERS/Nigel Marple

WELLINGTON (Reuters) - Fonterra Ltd FSF.NZ has been fined NZ$300,000 ($256,200) for the way it handled the food safety scare last year about potentially contaminated products and the damage the false alarm did to New Zealand's reputation for quality dairy products.

Fonterra said in August last year that it had found a bacteria that could cause botulism in a range of products sold by a number of multinational companies. Testing later showed there had been no botulism.

The scare prompted the recall of products, including baby formula, from shelves from China to Saudi Arabia, and led several countries to place a temporary ban on some New Zealand products. Fonterra said it would not contest the fines.

“New Zealand’s reputation for high-quality dairy products was shaken,” Fairfax News reported Judge Peter Hobbs saying on Friday.

The world’s largest dairy exporter had pleaded guilty to four charges of breaching food safety laws in the way it handled possible contamination of several products with a bacteria that might cause botulism.

The company faced a combined maximum penalty of NZ$500,000 for the charges. Hobbs said he noted Fonterra’s guilty plea and co-operation with authorities.

“Fonterra had already accepted responsibility for the allegations made in the charges, and we respect the sentencing decision made today,” Managing Director People, Culture and Strategy, Maury Leyland, said in a statement.

French food group Danone DANO.PA is suing Fonterra over the botulism scare, which it said cost it 350 million euros ($480.08 million) in lost sales.

Reporting by Gyles Beckford; Editing by Ryan Woo