Growers who admitted illegally using antibiotics in kiwifruit and whose affected fruit was dumped before entering the market may not face action but the decision ultimately lies with the Ministry of Primary Industries.
Some growers, desperate in their battle against the PSA virus, admitted misusing the antibacterial spray KeyStrepto to protect their crops.
Zespri spokesman David Courtney said KeyStrepto had been used in New Zealand since the 1970s but until last year it had never been used in the kiwifruit industry.
KeyStrepto contains the antibiotic streptomycin, used to treat tuberculosis and the plague.
The manufacturer of KeyStrepto sought approval for it to be used on kiwifruit vines last year as a way to combat the vine-crippling PSA disease PSA.
Use of the antibacterial spray was granted consent by the Environmental Protection Authority (EPA) and the Ministry of Primary Industries (MPI) who then set the rules surrounding its use.
Kiwifruit marketing organisation Zespri then approved its use under its crop protection programme up until December 1 last year.
The reason for the time limit was because after December the kiwifruit vines begin to flower, which could leave the spray's residue on the fruit, Mr Courtney said.
"Only about 10 per cent of the industry actually applied to use it at least once and clearly the vast majority of those people used it within the rules.''
KeyStrepto was allowed to be used only up to three times before December and only as a spray, never as a direct injection.
On March 9 a letter was sent to every grower outlining the declaration process for those who may have used KeyStrepto outside the rules for permitted use, Mr Courtney said.
"We wanted to encourage people to come forward and inform us where they had not followed the rules.
"The point was made in the letter that those who came forward would likely be viewed differently than those who did not and were then caught out by the 100 percent residue testing programme, but also said that ultimately it would be for MPI to decide what penalties would apply to growers.''
The letter from Zespri's chief executive was sent to all kiwifruit growers using the Zespri brand name.
In the letter it was outlined that MAF (now MPI) has the discretion to prosecute those who knowingly applied streptomycin other than in accordance with the approved protocols or sell kiwifruit that they knew has been treated with or exposed to streptomycin other than under approved conditions.
"The ministry has advised that, where growers fail to voluntarily disclose use which may put the industry at risk, they reserve the right to take a hard line approach, as outlined in the ACVM Act 1997.''
Possible punishments include fines of up to $150,000 for companies and imprisonment for up to two years for individuals.
The letter included a declaration for growers to fill in, disclosing whether they had used the antibacterial spray, and whether they had used it illegally.
The letter warned that growers who did not disclose illegal use of KeyStrepto would be found out through residue testing.
Mr Courtney said a number of growers came forward following the letter and admitted to using KeyStrepto outside of its authorised use, and had since had their fruit taken out of circulation to be "dropped onto the ground and mulched.''
The vast majority of the country's crop - more than 99.5 per cent - was cleared for export.