Fonterra has been fined $150,000d by The New Zealand Markets Disciplinary Tribunal for breaching continuous disclosure requirements to the NZX during the dairy manufacturer and exporter’s botulism false alarm last August.

Auckland-based Fonterra undertook a world wide recall after it quarantined several batches of whey protein concentrate last August on concern it was contaminated with a potentially dangerous strain of Clostridium bacteria, capable of causing botulism. The strain was ultimately shown to be harmless.

The dairy company first knew of the potential contamination on Wednesday July 31 but did not make the information public or inform the market until just after midnight on Friday August 2. Options in New Zealand’s largest company trade on the Fonterra Shareholders’ Market and allow dairy farmers to trade shares between themselves in a private market, while units in the Fonterra Shareholders’ Fund give ordinary investors access to the dividend stream.

Fonterra Shareholders’ Fund units closed at $7.12 on Friday August 2, before the company announced the contamination. When the market reopened on Monday August 5 the units traded at an intraday low of $6.50 and closed at $6.86, the tribunal said. A similar reaction was observed on the private dairy farmers’ share trading market.