1080 blackmalier Jeremy Kerr's million-dollar drug operation revealed

• Infant formula blackmailer Jeremy Kerr admits drug charges
• He was convicted a decade ago over hydroponics cannabis operation
• His threat is estimated to have cost the country $37 million

The man who was jailed for threatening to spike infant formula with 1080 was involved in a potential million-dollar drug operation years beforehand, it can now be revealed.

In March, Jeremy Hamish Kerr, 60, was sentenced to eight and a half years after admitting two counts of blackmail.

He is now looking at an extra stint added to that prison term after pleading guilty to five charges in the High Court at Auckland this morning.

The existence of charges, which came about as part of a large-scale police operation, had been suppressed to preserve Kerr's fair trial rights but that lapsed today when he admitted four counts of possessing class-C pills for the purpose of supply and one of selling a class-C drug.

Court documents released this afternoon show Kerr had pills containing Benzylpiperazine (BZP) and Trifluoromethylphenylpiperazine (TFMPP) psychoactive substances found in party pills.

Police search warrants executed at his Contimo business address in Highbrook and at an East Tamaki storage unit uncovered 32,000 pills which could have sold for up to $40, possibly netting Kerr as much as $1,280,000.

But he later told officers he had only been flogging the tablets at $2 a pop.

He came to the police's attention when they followed another person of interest to a South Auckland cafe who was meeting Kerr.

Police then kept tabs on the 60-year-old, following him as he drove around the city.

Covert searches of his storage unit in September 2011 found "a variety of pills, powders, pill dyes for pressing pills with a variety of logos such as are commonly found on ecstasy tablets, and other paraphernalia for pill pressing", a Crown summary of facts said.

When the operation was finally terminated in November 2011, police found at the unit:

• a zip lock bag with 1473 "X" pills containing BZP and TMFPP

• a zip-lock bag with 7927 "CK" pills containing BZP and TMFPP

• four zip-lock bags containing 18,000 red/pink doves/score line pills

• dyes, machine stamps and pressing compounds

A raid of the Contimo business property turned up:

• several zip-lock bags containing more than 5300 red/pink "CK" pills

• five pill-press machines set up to stamp with "CK" logo

• pills, powders, dyes and machine stamps

Kerr told police he had the BZP powder left over from when it was legal in 2005 and the 3kg of the powder he had been "trying to get rid of for a long time".

It can also be revealed today that in 2004 police found a hydroponics cannabis operation of 450 plants with an estimated street value of $150,000 hidden inside premises he also used for his pest control business. The plants were inside shipping containers equipped with extraction fans, ultra-violet lighting and watering systems.

Most of the factory was boarded off to conceal the cannabis operation, police said at the time.

Kerr's blackmail case was called "near the most serious case of its kind" by Chief High Court judge Justice Geoffrey Venning, after the court heard it cost the country more than $37 million.

In November 2014, Kerr mixed highly concentrated amounts of the poison with baby milk formula and posted them to the dairy co-op and to Federated Farmers, with a letter demanding the country stop using 1080 or he would release poisoned infant milk powder into the Chinese market and one unspecified market.

Kerr initially denied involvement when interviewed by police but later confessed when DNA evidence proved he had written the threat letters.

The 60-year-old denied his actions were financially motivated but Justice Venning disagreed.

Kerr owned a rival pesticide called Feratox, for which he received annual royalties of more than $100,000.

If 1080 had been taken off the market, it is likely use of his product would have increased, the court heard.

Kerr will be sentenced on July 8.