Fonterra has been fined $192,000 for its involvement in a bad stench drifting through a small Taranaki town.

The dairy giant was fined for dumping 300 million litres of excess buttermilk and raw milk into the Eltham Wastewater Treatment Plant in October 2013.

The treatment plant was later discovered to be unable to cope with the substance, causing an unpleasant odour to be smelt by nearby residents.

Judge Brain Dwyer believes Fonterra had more culpability than the South Taranaki District Council which was earlier this year fined $115,000 dollars.

The conviction is Fonterra's third for breaking the Resource Management Act.