West Australian 'Spud King' Tony Galati's business fined for illegal chip factory

West Australian "Spud King" Tony Galati's group of businesses has been fined for illegally setting up a chip factory in the state's South West without official approval.

The Galati Group pleaded guilty to breaching the Environmental Protection Act in 2023 and 2024 by setting up a chip-making factory for Spuddies brand potato chips in Myalup, 140km south of Perth, without the required license.

The company also admitted to dumping non-oily chip-making waste on the site without a license.

In Bunbury Magistrates Court today, Magistrate Stephen Butcher sentenced ABV Food Processing, owned by the Galati Group, to a fine of $20,000.

"There had been multiple notifications sent to the company, it was a live issue, they were on notice of it," he said.

"They were assisted by professionals.

'Grand opening' tipped off officials

In April 2024, the Galati Group created a home brand of chips called Spuddies, which were distributed and sold at Spudshed stores across the state.

In sentencing submissions, the court heard an officer from WA's Department of Water and Environmental Regulation (DWER) had been notified of the factory's imminent grand opening for February 2024.

A day later, a DWER official emailed the Galati Group to advise "amongst other things that it would be an offence to commence any works", the court heard.

It is unclear whether this correspondence was responded to.

Despite having no works approval from the department, the Galati Group installed the chip processing facility between November 2023 and April 2024, the court heard.

Between those dates, the company installed an industrial peeler, blancher, fryer, converter belt, and weight heads for a "precise partitioning and bagging system".

Belated application after chip production begins

In June 2024, a DWER officer emailed Galati Group chief executive Frankie Galati, advising she would like to read the meters at the Myalup property.

Mr Galati responded the next day, advising that chip production at the facility had already begun.

The department responded, reminding the company that it needed a works approval and license, but received no response.

In November, the department received an application for the works, but it was withdrawn in May, a year after the facility had begun producing chips.

Prosecutor Rosanna Panetta argued a fine was not sufficient, arguing the Galati Group had knowingly breached the law and had not cooperated with DWER.

"The language is clear that one should not operate a facility until a license to operate has been granted," Ms Panetta told the court.

But Galati Group lawyer Paul McQueen argued that the company could not be held responsible if contractors were slow at responding or did not respond at all.

Magistrate Butcher disagreed, arguing the business was sophisticated and should be held to a high standard due to its scale.

"(The company) is assisted by professionals, qualified planners and consultants," he said.

Magistrate Butcher said the offending was on the low-to-mid range, while the dumping of the waste was on the lower range, as no environmental damage was done.

A works application for the factory has since been lodged.

A high-profile farmer-turned-businessman, Mr Galati played a central role in the deregulation of the WA potato industry.