The bakery, owned by Evron Foods, was found by Torfaen Environmental Health officers to be using water that was contaminated by the chemical trichloroethene (TCE).
The water was being used as an ingredient in some bakery products, including four par-baked breads which were ready to be supplied to multinational food retailers. This led to the withdrawal of bread products from across the UK.
Easibake Foods pleaded guilty to two charges for the unlicensed abstraction of water and failure to ensure food was not contaminated.
A spokesman for Easibake Foods has stressed the company had co-operated fully with Torfaen County Borough Council, and said it had acted swiftly to stop using water from its private supply and had undertaken a precautionary withdrawal of bread products made at Pontypool.
He added the issue had posed a very low risk of adversely affecting human health and, since the incident, the water borehole had been closed.
The spokesman said: “Easibake Foods takes very seriously its responsibilities for maintaining the highest quality levels in relation to all aspects of their manufacturing processes. Regular tests have taken place since the incident all of which have resulted in exemplary reports.”
Councillor Gwyneira Clark, executive member for housing, planning and public protection at the council, said: “In this particular case, it was not just a case of protecting the public health of Torfaen residents but those consuming bread products across the UK.”