Alexander Töldte, chief development officer of New Zealand dairy giant Fonterra, has announced a "successful resolution" to the company's long-standing legal dispute with UK Customs, regarding imports of New Zealand butter and cheese into the European Union in the mid-1990s.

The dispute related to demands by UK Customs for £323m (US$562.8m) in back-duties for products imported by subsidiaries of the New Zealand Dairy Board. This followed an audit by the EU Court of Auditors in 1996, which criticised various import procedures that had been in place for several decades.

"The claims were complex and highly technical," said Töldte.  "They involved the interpretation of EU quota requirements relating to product composition, method of manufacture, weight of butter and cheese and customs procedures for the importation of the products."

After various reviews by UK and EU authorities, and numerous court hearings, it has now been agreed that duties totalling £11m are due, which will be met from funds already held by UK Customs, Fonterra said.

The previous quota regime has since been replaced by a new and exacting compliance and testing regime.  Fonterra said it has been working closely with the UK, EU and New Zealand authorities to ensure that similar problems do not happen again.