Prime Minister John Key has welcomed news that 1080 blackmailer Jeremy Kerr will spend eight years and six months behind bars, saying Kiwis would be appalled by his "despicable" behaviour.

The 60-year-old had the country on high alert in 2014 after he posted two letters to Fonterra and Federated Farmers threatening to contaminate baby formula milk powder with 1080 poison, unless the Government agreed to stop using it by March 2015.

It was revealed on Wednesday that Kerr's blackmail attempts had cost Fonterra, Federated Farmers, Foodstuffs, police, the Government and other dairy companies $37 million in investigation and increased security.

CHRIS McKEEN/FAIRFAX NZ Jeremy Kerr's actions cost $37 million in investigation and increased security.

Speaking to media after the sentencing, Key said it would be "a great relief to New Zealanders that this person would be put behind bars".

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"To go out there for commercial and profiteering gain, put out the sort of scaremongering campaign and at least argue that they're gonna carry out the threats that could kill babies, it's just despicable behaviour, and I think New Zealanders will be quite pleased that he's got the sentence he has."

Kerr's threats had put "enormous stress on families" as they worried about the safety of their children, Key said.

"You were asking families to have faith in the system, that everything we'd done in terms of the testing and the testing around that infant baby formula lived up to what we said it would do.

"While it did...it's still the mothers and fathers and caregivers that are feeding those children, they're their loved ones, and to be in a position where that stress is added to the family is just grossly unfair."

The sentence should act as a "very strong deterrent" for similar blackmailing attempts, Key said.

MAXIMUM PENALTY ASKED FOR

The substantial loss prompted the Crown to ask Justice Geoffrey Venning in the High Court at Auckland to consider the top end of the maximum penalty possible - 14 years imprisonment.

Justice Venning agreed this was appropriate, describing the threats as "particularly serious" and credible, but after a series of discounts applied for early guilty pleas and mitigating factors, an end sentence of eight years and six months imprisonment was reached for each charge, to be served concurrently.

He declined to impose a minimum period of imprisonment.

Kerr's plot was foiled after he panicked following the intense media coverage about the anonymous threats, prompting him to send a retraction letter to police in July 2015.

That letter had his DNA on it and during a lengthy police interview he eventually confessed but denied the blackmail was financially motivated, as the Crown alleged.

Kerr had developed and was successfully selling his own poison, Feratox, but his colleagues would later testify that sales were static and banning 1080 could give Feratox sales a nudge, although the ground laid poison could never replace the aerially dropped 1080.

A disputed facts hearing found "beyond reasonable doubt" that Kerr was under "considerable" financial pressure after his poison-sale royalties had dropped from $135,000 per year to $100,000, a summary of facts said.

COST TO TAXPAYER 'SUBSTANTIAL'

At Kerr's sentencing at the High Court at Auckland, Crown prosecutor Christine Gordon QC said the cost to the taxpayer had been "substantial" as the police had spent more than $4 million in investigation costs, while Fonterra had suffered a loss of $20 million.

Fonterra safety manager Maury Leyland read a victim impact statement, one of 14 submitted to the court, saying the threat had "struck at the heart of our business".

Defence counsel John Billington QC denied his client was financially motivated, because the financial gain to Kerr could only have been tens of thousands which he described as "modest".

Kerr had no intention of following the threat through, he said.

"Of course he was aware the withdrawal of 1080 would produce a financial benefit for him, the logicality is of course is that although the financial benefit was foreseen it was modest. When you balance that against his conduct, it doesn't make sense."

Reports provided to the court said Kerr was genuinely remorseful and didn't believe the letters would be taken seriously.

"The pre-sentence report writer said when your offending was described to you, you felt sick," Justice Venning said. "You accepted you put many people through so much and you accept people may have lost jobs because of you. You repeated however that you were frustrated by the use of 1080."

FONTERRA EMPLOYEES 'ALARMED'

Safety manager Maury Leyland said Fonterra employees were alarmed and anxious when police were forced to take staff fingerprints and DNA as part of Operation Concord.

"This threat had a very real, emotional and financial cost on Fonterra's people and business," she said. "It's important to remember what a catastrophic effect this had on the lives of children. It is hard to imagine a worse threat to children and families."

FEDERATED FARMERS 'DISMAYED'

CEO Graham Smith said the threat had cost Federated Farmers more than $100,000. "This was a direct attack on the very fabric of society," he said. "This would have had a devastating impact on families and their communities for many decades to come. The economic and reputational cost to New Zealand would have been immense."

'CREDIBLE THREAT TO FOOD SAFETY'- MPI

The Ministry of Primary Industries hired an extra 22 full time staff and dedicated 100 extra staff, totalling 22,000 hours of work into devising regulatory security change and extra testing, the cost of which was "conservatively" measured at $4 million.

"In sum, the distribution of contaminated formula in blackmail letters presented a credible threat to the lives of infants and jeopardised New Zealand's hard earned reputation," the victim impact statement said.

HOW KERR WAS CAUGHT

-DNA found on the retraction letter matched a sample Kerr provided to police and was 260 times more likely to have come from him or a member of his family more than any other Kiwi male

-1080 samples found in Kerr's possession were found by a University scientist to have come from the same source as 1080 samples sent with the blackmail letters

-A computer used by Kerr was found to have been hooked up to a printer and a Brother label maker. A brother label was found on the letters and Kerr had previously denied ever using one or owning one

-Cellphone records placed him in Wellington mail catchments at both times the letters were sent. Kerr initially said he couldn't remember why he was there, except to assume he was visiting friends