Sausage maker Hellers has forked out almost $55,000 after mispackaging Sizzlers sausages.
Three children had moderate to severe allergic reactions in September last year after eating Cheese Sizzlers, which were wrongly packaged as Original Sizzlers.
One of the children had a severe anaphylactic reaction that required hospital treatment.
The Ministry for Primary Industries (MPI) prosecuted Hellers after an investigation and found the sausages, packed at Hellers' Wiri factory, didn't have cheese on the ingredient list.
MPI manager of food compliance Melinda Sando said the mispackaging incident could have been prevented had staff cross-checked the product and its labels before packing.
"The company had a duty to ensure its products were safe and suitable. Proper labelling of allergens is a key requirement in discharging this duty and consumers should be able to rely on food labelling when making their purchasing decisions. This is especially so for those with food allergies."
MPI charged Hellers with one charge of failing to ensure food is safe and suitable, laid under the Food Act 2014.
The sausage maker pleaded guilty to the charge and has since enforced additional staff training and procedures.
Hellers was fined $39,375 and ordered to pay $5000 to each of the three children.
Allergy New Zealand's chief executive Mark Dixon said the prosecution was a timely reminder for food businesses to take food allergen management seriously.
"The recent tragic death of Auckland teenager Edyn Rubena-Misilisi shows how dangerous accidental food allergic reactions can be. Food allergy is not a lifestyle choice, it is a challenging condition which needs to be managed all day every day for many thousands of people."
He said there had been a significant increase in food recalls for undeclared allergens in the past year.
"An issue we need to address is how to get warnings to consumers who have already bought a product believing it to be safe for them, which is subsequently recalled because of an undeclared allergen. In this case, it could have had tragic consequences.
"This incident is also a reminder to companies to use a range of communication channels to reach their customers during a food recall."