Busted: Farmer fined after selling raw milk to undercover agent in nationwide sting

What started as a seemingly-innocuous door knock has ended with a $30,000 fine for raw milk supplier John Martin.

"We had a man turn up to buy some milk one morning and we were so busy bottling up I didn't think to check he was signed up as one of our customers," John said.

The man - who working undercover for MPI - would then tip the bucket of milk away on the side of the road, coming back six times to collect milk and gather information about John and his wife Phillippa's business.

Technically they were criminals.

They were raided in December 2019 by the Ministry for Primary Industries as well as other raw milk suppliers in Auckland, Hawke's Bay, Manawatū, Horowhenua, Nelson and Southland following a year-long operation to identify illegal producers of raw milk.

Phillippa Martin said the way they were treated was if they were peddling meth instead of milk.

"They went through our trash, confiscated our computers and hard drive… their photocopy bill alone was thousands of dollars," she told Open Justice ahead of her husband's sentencing.

John Martin, 78, appeared before Judge Brigid Edwards in the Levin District Court today, convicted of multiple breaches of the Animal Products Act this afternoon.

Judge Edwards awarded significant discounts to his fine, which had a starting point of $59,000.

"You have farmed your Manakau property for 60 plus years, you've never had any issues with the regional council and …it is clear that you have gone out of your way to offer employment and pastoral care to young people struggling with confidence, mental health and drug addiction and to employ those who may have had difficulty securing employment elsewhere."

New legislation which came into effect in 2016 enforced new rules on how farmers bottled, stored and distributed raw milk.

A loophole to these laws was to create a limited partnership agreement where customers would buy into the milk business, and then effectively just be "given" their own milk.

But you had to be signed up.

This marked the beginning of Phillippa and John Martin's problems when they sold milk to an undercover MPI officer posing as a customer - who wasn't signed up to the partnership.

According to the summary of facts the Martins hadn't registered their limited partnership with MPI either.

Philippa and John Martin's raw milk business has run dry since they were raided by MPI. Photo / Jeremy Wilkinson

This is something they freely admit when asked if they knew their operation was illegal.

"The new legislation was largely unworkable and totally unfair. We couldn't figure out a way to make the service that we'd been providing to people work under the new legislation," Phillippa Martin said.

"With the new legislation they made the rules so hard and unworkable we were going to sign up and drop the number of depots we were operating but we could see that a lot people wouldn't have been able to access the milk. So we got the paperwork and decided we'd go for the limited partnership model."

There are several ways for consumers to get their hands on raw milk:

The first is to collect it from the farm itself, which is often not feasible as most farms are in rural locations.

The second is to deliver it to the customers direct.

The third is to set up and maintain depots in various locations where customers can pick their milk up from. However, Phillippa Martin says this method was simply not workable either.

"You effectively have to register all your customers as transport operators who have to test the temperature of the milk on pickup and then again on drop-off, keep a record of all the milk they collect… and they can't share that milk, not even with their partner."

"The law is just so illogical. It seems really unjust."

"Under MPI's new laws for home deliveries it's perfectly legal to leave the milk in the sun all day, there's no requirement for chilling. MPI go on about the safety of the milk and how dangerous raw milk is, but it was illegal for us to leave milk in a chilly bin with ice packs next door."

A raw milk supplier in Nelson escaped a discharge without conviction last week after he was found to be in breach of MPI's rules.

However, in that instance the farmer was only supplying the equivalent of one to two dairy cows' worth of raw milk per day to family and friends.

According to an Official Information Act request sent to Open Justice, the Ministry for Primary Industries has spent nearly $200,000 on Operation Caravan targeting raw milk suppliers between 2018 and 2022.

That includes $124,000 spent on crown solicitors and $26,000 on travel, accommodation and associated costs for its staff.

According to MPI there are still six cases before the courts, and 10 cases have so far been prosecuted.

"We expect today's sentence sends a strong message to all dairy farmers involved in raw milk production," New Zealand Food Safety deputy director general Vincent Arbuckle said in a statement.

"Raw milk is inherently much more of a food safety risk than milk that has been pasteurised to kill potentially harmful bacteria."

Arbuckle said Mr Martin had attempted to avoid the regulations by distributing raw milk to customers through a separate legal entity and claiming it was not for sale.

"Our investigation found Mr Martin ignored a previous Notice of Direction to cease sales and continued to sell product illegally both through the legal entity and direct to customers."

"Mr Martin went to some lengths to avoid his responsibilities under the law. By contrast most raw milk producers follow the rules and find it easy to do so.

"Compliance with the rules would have cost his company MannaMilk $10,000 - $15,000 a year, a small amount next to the $243,000 MannaMilk made in 2019," says

Phillippa Martin disagrees with Arbuckle's statements about how profitable their business was.

"In terms of the money we made, we didn't really make any," she said.

"The court focuses a great deal on how much we made, but they only looked at the gross not the net income."

According to the summary of facts their business MannaMilk generated $243,000 through raw milk sales in 2019.

The Martins still run a normal milk business from their farm in Manakau, south of Levin. Photo/Dairy NZ

In January this year MPI dropped the charges against Phillippa but the six charges against John remained, and he was convicted on three charges of breaching the Animal Products Act.

One of those charges relates to an incident where milk produced by the Martins failed a quality test for bacteria.

"By the time the results came back a week later… well the milk was ready sold and probably drunk," John Martin said.

"It was about three tests per month… but they took nearly a week or more to get the results."

Phillippa Martin says they could have done things better and been more-careful to abide by the laws. But they're not going to give it another go.

"We still get phone calls and it's really hard to say no we can't supply you milk anymore. We're just too tired now… we've had it really."

The couple still have a contract with Fonterra for "normal" pasteurised milk and about 300 cows which is managed by their son.

"What is important to me regardless of what happens in the court is that I am not ashamed of anything I've done, I can walk down the street of Levin and I don't have to hide form anyone. And that is important to me. "

"So was it worth it? Yes. My conscience is clear."