The country's biggest mushroom grower has been caught ratting on its Waikato competitor, leading to its closure.

The country's biggest mushroom grower, Meadow Mushrooms, has been caught ratting on its Waikato competitor, leading to its closure.

Mercer Mushrooms was forced to close in August after compost imported from Europe was found to contain animal manure, which is not permitted under its import licence.

The closure has put 70 people out of work. It's not known when the Waikato company will reopen for business.

At the time, Mercer Mushrooms' boss accused Christchurch-based Meadow Mushrooms of anti-competitor behaviour for threatening the Ministry for Primary Industries (MPI) with a judicial review, preventing Mercer Mushrooms from continuing to import the growing material.

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When asked in August if Meadow Mushrooms' lawyers had approached Crown Law, threatening to issue judicial review proceedings, company chairwoman Miranda Burdon said she "did not have a comment on that".

"Our behaviour, our actions are not driving MPI's actions."

Information obtained through Official Information Act shows Meadow Mushrooms contacted MPI over a fertilizer that its competitor had been importing.

One email read: "I am writing regarding a potentially serious biosecurity matter that concerns the mushroom industry. It has been reported to me that inoculated mushroom compost is being imported into NZ by a mushroom company - Mercer Mushrooms Ltd - from Europe, and (we assume) that this has been permitted by MPI."

The email trail shows that Meadow Mushrooms contacted the company in Europe to find out what materials were used in its compost.

A lawyer representing Meadow Mushrooms also emailed MPI threatening a judicial review after MPI decided to continue with allowing biosecurity clearance for the imported fertilizer.

When approached on Tuesday, Meadow Mushrooms chief executive John Barnes would not comment.

Meadow Mushrooms was co-founded by former National Party cabinet minister Philip Burdon.

Mercer Mushrooms director Glen Inger said Meadow Mushrooms' actions were "very disappointing".

"I think its anti-competitive. It's disappointing that they are trying to scaremonger when all the risks we are very conscious of.

"There's no way I would bring anything into the country that could risk biosecurity."

He said the company was of the understanding from the supplier at the time that the product contained no traces of animal matter.

Following an MPI investigation, Mercer Mushrooms' import permit was revoked, as the product was found not to comply with existing Import Health Standards.

Having the permit revoked meant the company could not continue to operate.

The company had just closed its compost yard as the importation of substrate was under way.

It had been working on expanding, spending $12.5 million on building a new growing facility as well as upgrading its existing facility.

The facility, which produced on average 18 to 20 tonnes of mushrooms each week, will be closed while it secures another permit.

MPI has visited the manure production plant in the Netherlands, sought more information and revisited its risk assessment for the manure. It is now in the process of drafting an Import Health Standard that will cover animal-based manure.

Inger said there is no timeframe for when the company will reopen.