Long-established Havelock North business Te Mata Mushrooms is being prosecuted on charges carrying a maximum $600,000 fine for multiple alleged breaches of its resource consent.
The Brookvale Rd company has been the subject of regular complaints about the odour it produces which has allegedly wafted over its boundary in breach of its consent conditions.
It has also been accused of failing to build a multi-million dollar building to contain its compost-making facilities - another requirement under its resource consent.
Hawke's Bay Regional Council said yesterday it was prosecuting the company for discharging "offensive and objectionable odour" beyond its property on six different dates in March and April.
The council said the odour comes from the process of making the compost the mushrooms are grown in.
"Part of the process is performed outdoors and involves mixing straw, chicken manure, gypsum and water that produces a chemical reaction that results in fermEntation and the production of odour."
The Company was granted a resource consent in 2012 that required it to construct a building or buildings with an appropriate ventilation and biofilter system that fully enclosed the composting process, by the March 1 of this year.
"No such construction has been initiated to date," the council said.
Local residents had made "numerous complaints" about the odour and council staff had assessed it as being offensive and objectionable.
The council's manager of resource use, Wayne Wright, said the council was "not in the business of closing companies down" but Te Mata Mushrooms' neighbours "have a right to enjoy going about their normal activities in their homes, without having to restrict outdoor activities and keep doors and windows closed".
"There is a degree of sympathy for the company given that the number of residential dwellings in the area has increased markedly, but that does not remove the company's responsibility to modify how it operates to meet the changing expectations of the community".
Preeminent Hawke's Bay businessman and Te Mata Mushrooms owner Michael Whittaker, who bought the business in 2013, could not be reached for comment yesterday.
When the council said late last month it was considering legal action, Mr Whittaker said he was "working constructively" with it to develop a solution to the odour issue. "Any solution we implement is a multi-million dollar investment so it is important we make sure the farm remains viable as a result of this investment," he said.
Havelock North resident Graeme Mansfield, who lives about 800m from the farm's boundary, said the odour was "putrid" at times. "It's almost gagging stuff, " he said.
"I'm not blaming Michael Whittaker but he's in business, that business has got restrictions through a consent that's been issued by the regional council ... we just want the council to enforce its own regulations."
Mr Mansfield said he did not accept the argument residents had no right to complain because they had bought into the area knowing the mushroom farm was there. Neighbours had the right to expect the business' consent, would be complied with, he said.