A Scottish fish farming plant, whose workers complained of a mystery illness, had been reprimanded by the US Food and Drug Administration (FDA) for "serious violations" of food safety rules on pesticides in salmon.

A processing plant at Connel, in Argyll, which is run by Scottish Sea Farms, was warned by the FDA in March that it was in breach of US federal regulations.

"Your firm's aquaculture farmed salmon appear to be adulterated," the FDA said, "in that the products have been prepared, packed, or held under conditions whereby they may have been rendered injurious to health."

The company exports salmon worth £12 million a year to the US, and its Argyll plant was visited by FDA inspectors in September 2011. They were concerned about the way fish were tested for residues of three pesticides used to kill sea lice.

The plant has also seen half its 40 staff fall sick recently, with some suggesting that toxic chemicals they were exposed to at work could be to blame. However, this was denied by Scottish Sea Farms.

But the revelation the plant had been investigated earlier by the FDA has sparked fierce criticism from an anti-fish farming campaigner.

"It's now official – salmon farming makes people sick," said Don Staniford, from the Global Alliance Against Industrial Aquaculture.

"I'd rather eat my own vomit than eat Scottish farmed salmon. The ugly truth is that consumers should avoid farmed salmon like the plague. Cheap and nasty farmed salmon leaves a bad taste in the mouth."

Staniford claimed it must be "stomach-churning" for staff at the Argyll plant to discover the FDA had warned that its fish could be harmful to health.

"Scottish farmed salmon, like cigarettes, should carry a government health warning," he argued.

Scottish Sea Farms, however, insisted there was "no connection" between the FDA reprimand and the outbreak of illness. It pointed out that the FDA had concluded in August that the issues it had raised had been "adequately addressed".

According to Rory Conn, the company's UK sales and commercial manager in Stirling, it now complied with FDA regulatory requirements.

"Farmed salmon have been exported to the US by Scottish Sea Farms for many years and these exports continue with the full knowledge and approval of the US authorities," he said.

The company said 20 staff had made management aware they were suffering flu symptoms on October 11 this year. They had been sent home, and advised to consult their doctors.

"Scottish Sea Farms immediately launched an investigation which included requesting a site visit from the local environmental health officer. Following a full internal investigation and an inspection by environmental health, no source for the illness was identified," the company added.

"All chemicals used for cleaning the plant were confirmed to be at acceptable and normal standards," it said. "The members of staff that were ill returned to work over the course of the next few days and processing operations continued as normal."

Scottish Sea Farms also supplies salmon to Marks and Spencer. It is branded "Lochmuir salmon", a fictional location invented by the retailer to aid sales.

M&S described the warning from the FDA as a "minor issue" that had been dealt with. The illness at the Argyll plant was seasonal flu, a company spokeswoman said.

When contacted by the Sunday Herald last week, the FDA initially said the warning to Scottish Sea Farms was "still considered open at this time". But an FDA spokeswoman later issued a correction saying the case was now "closed".