King Salmon has been censured for lax biosecurity controls after two previously unknown bacteria were found in its fish.
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It is part of a Ministry for Primary Industries (MPI) report into unusually high death rates of salmon at one of the company's Marlborough Sounds farms.
The deaths were found to be partly due to the two bacteria and MPI placed strict biosecurity controls on King Salmon.
However, chief executive Grant Rosewarne told Morning Report the bacteria occurred naturally in the environment and there was no sign its fish were a carrier of disease.
Mr Rosewarne said the main issue was its farms did not have enough space to ensure its salmon were healthy all the time.
"Water flow is the key factor as to whether those fish are stressed or not.
"When a salmon is stressed they're susceptible to a whole range of just common bacteria that are present all the time in the environment but normally cause no problem.
"So it's really important that they're in a good location. They need depth, they need temperature, they need a really good feed and they need as low a stress as possible."
He said there was not a single negative consequence anyone could point to as a result of those "relatively minor" issues.
"The main issue is, do we [King Salmon] have enough space for top world-class biosecurity, and the answer ... is no."
The latest report showed the company ignored MPI's controls and continued to turn possibly infected fish into burley for sale in the North Island.
The company was sent an urgent notice in the middle of last year to stop.
MPI's investigation found several breaches of its biosecurity management plan, and that the company failed to follow best practice for preventing the spread of disease.
Mr Rosewarne said the company had been turning the salmon leftovers into burley for 20 years, and it was King Salmon that brought that practice to MPI's attention.
"Now, as it turns out we don't have a serious disease, there's not been one negative consequence of that.
"The good news is we're now relaunching that product after it's been heat-treated, and it will be available once more."
