Drink bottler Cottonwood Springs has been fined more than $8,000 by EPA for continuing to discharge waste water to the environment.
EPA South West Regional Manager Carolyn Francis said community members' complaints about odour prompted an inspection by EPA officers.
"Our initial inspection found organic sludge flowing an estimated 50 metres from a malfunctioning wastewater treatment unit onto open land on the premises at Dunnstown, near Ballarat," Ms Francis said.
The operator committed to remove the sludge to stop odour and minimise any further impacts, but a second EPA inspection four days later revealed the sludge was still there.
"We issued regulatory notices requiring the company to remove the sludge, stop discharging to the land and provide a detailed wastewater management plan to EPA for approval," Ms Francis said.
"Another inspection a few weeks later found the company had removed the sludge material but had not complied with the instruction to cease discharging waste water, having instead made on-site modifications to the water flows," she said.
Operators are required to comply with specific EPA requirements and only consider alternatives with EPA approval.
"The Cottonwood Springs facility is owned by Slades Beverages of Thomastown. The company had had its chance to fix the problem but failed to comply fully, so EPA has fined it $8,261," Ms Francis said.
EPA is conducting follow up inspections and discussions with the company and has issued an additional notice requiring it to install a bund around the holding tanks to trap any future leaks.
The organic sludge was determined to be from the beverage wastewater treatment and not related to the management of septic wastes in a separate system.
Under the Environment Protection Act 1970 and the Infringements Act 2006, the company has the right to have the infringement notice reviewed or be considered by a court.
Members of the public can report pollution by calling EPA's 24-hour hotline on 1300 EPA VIC (1300 372 842).