1080 blackmailer jailed, cost Fonterra $20m

See also: 1080 blackmailer's sentence 'sufficient deterrence'

The businessman behind the 1080 blackmail threat caused damages in excess of $37 million, including more than $20 million to Fonterra [NZX: FCG] alone.

Jeremy Hamish Kerr, 60, who was earlier this month found to have been financially motivated in blackmailing Fonterra and Federated Farmers, was today sentenced to eight-and-a-half years’ jail.

Crown lawyer Christine Gordon, QC, had sought the maximum sentence available of 14 years' jail before Justice Geoffrey Venning, as well as a minimum sentence, saying the nature of Kerr’s threat, the extent of the loss caused, and his motivation were all serious aggravating factors.

Although Kerr had pleaded guilty to two counts of blackmail last year and was convicted, he unsuccessfully contested whether he was motivated by money during a disputed facts hearing earlier this month.

Ms Gordon, QC, told the High Court at Auckland today the threat directly cost 14 agencies and companies more than $32 million; or more than $37 million when the cost of the police investigation is included.

Fonterra’s outgoing managing director of people, culture and, safety Maury Leyland, who led the response to the 1080 blackmail attempt, provided a victim impact statement on behalf of the dairy cooperative.

She said Kerr’s threat, which could have had a “catastrophic impact” and struck to the heart of its business, cost Fonterra an estimated $20 million.

This included more than 9500 hours of work between 180 staff, a national security upgrade and extensive testing.

Ms Leyland said it was hard to imagine a worse threat to children, and said market confidence was “pivotal” to the organisation.

Fonterra announced this morning its interim after-tax net profit was up 123% to $409 million, as earnings before interest and tax increased to $665 million.

Federated Farmers chief executive Graham Smith told the court the threat was a “direct attack on the very fabric of society.”

He said there was a “real risk” Kerr’s threats could have seen countries ban New Zealand food products.

MPI deputy director-general Scott Gallacher also provided a victim impact statement on behalf of his agency, for which the cost of the threat was estimated to be $4.2 million.

Kerr’s lawyer, John Billington, QC, said Kerr had no intention of actually poisoning anybody and what occurred was a threat, not a "carrying through."

He said there was a need to balance the criminality and culpability of Kerr with the very considerable losses, and the extent to which they might have been foreseeable.

“It was never intended this threat be carried out.”

Mr Billington, QC, had sought a starting point for the sentencing in the range of eight and 10 years’ jail while also submitting a minimum sentence was not appropriate in this case.

Justice Venning said Kerr knew his threats, which the judge regarded as “particularly serious,” endangered legitimate business interests, however, and his intentions were quite clear.

The judge imposed a starting point of 10-and-a-half years’ jail, noting Kerr was "extremely remorseful."

He did not impose a minimum term.

Read the sentencing notes here.

Read Fonterra's full victim impact statement here.

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