Image copyright Reuters Image caption Fonterra reportedly spent NZ$20m in doing checks after it received the threat

A New Zealand businessman has been jailed for eight and a half years for threatening to spike baby milk formula with controversial pesticide 1080.

Jeremy Kerr sent anonymous letters containing packets of pesticide-laced milk powder to dairy giant Fonterra and a farming body in November 2014.

The exercise sparked an international scare and cost Fonterra and authorities NZ$37m ($25m; £18m) in investigations.

New Zealand is the world's largest dairy exporter.

The dairy industry forms the backbone of its economy.

What is 1080?

Controversial pesticide that has been used in New Zealand for decades.

Used in large quantities to control pests like possums, rats and stoats, which are predators introduced to New Zealand and are a threat to native plants and animals.

The government says it is biodegradable, does not build up in the food chain, can be safely applied by air, and is a cost-effective pest control. An independent parliamentary commissioner endorsed its use in 2011.

But activists say it is a cruel practice which also kills native wildlife and pets, and have questioned its safety.

Kerr had pleaded guilty to two charges of attempted blackmail in sending the packages, which appeared to be a protest against the widespread use of 1080 in New Zealand.

A judge ruled that Kerr, who owned a company that manufactured an alternative pesticide, had done it knowing that he would benefit financially if 1080 was banned.

Justice Geoffrey Venning said Kerr's actions had "posed a major threat to trading relationships between New Zealand and other countries," reported NZ Herald.

Fonterra alone reportedly spent NZ$20m as it secured supply chains and conducted checks.

Image copyright Getty Images Image caption The threat sparked a nationwide scare last year as authorities spent millions doing checks

Fonterra faced a food scare in 2013 when it said contaminated products that could cause botulism had been exported overseas.

It was later found to have been a false alarm, but it led to many countries blocking imports of those particular products. China lifted its ban in October 2014.

Prime Minister John Key was quoted in local media as saying that New Zealanders would be "appalled" by Kerr's behaviour and would be "pleased" at his jail sentence.

"To go out there for commercial and profiteering gain, put out the scaremongering campaign and at least argue that they are going to carry out the threats that could kill babies is just despicable behaviour," he said.