Four Season Exotic was charged more than £3,500 at Birmingham Magistrates Court in England.
It was fined £800 for the offences, £2,709.95 costs and a £40 victim surcharge.
An HMI inspection in February last year found two regulated displays breaching EU marketing rules for fresh produce quality which included orange sweet peppers for sale in a rotten condition.
Prosecution followed risk-based enforcement visits and inspections, by HMI between February 2014 and February 2015.
HMI said it tried to work with Four Season Exotic director Jaffer Mohammad through face-to-face meetings, verbal warnings and formal written notices to achieve improved compliance.
Paul Caldwell, RPA operations director, said it pursues criminal prosecution as a last resort when other attempts to gain the compliance of traders have failed.
“It is important that consumers have confidence and are reassured that they are buying good quality fresh produce which is accurately labelled. We will not hesitate in taking all necessary steps to ensure that they do.”