Elders settles beef with cattle producer

Elders will pay $4 million in cash and merchandise to Australian Agricultural Company under the terms of settlement.

Australian Agricultural Company, the country's biggest cattle producer, began legal action in 2005 after it said feed additives from Elders did not contain the nutritional content advertised and had adversely affected the fertility of its herd.

The dispute came to a head in March when the chief executive of Australian Agricultural Company, David Farley, stopped all business dealings with Elders, which until early last year held a 43 per cent share in AAco.

"David had made it clear that it was difficult to have a sensible commercial relationship with us when we still had this litigation hanging over us, and that was a good catalyst for both organisations to really work hard to get an agreement," the Elders chief executive, Malcolm Jackman, said. He declined to comment on the amount of sales the stand-off has cost his company, saying he was pleased to have "restored the right relationship" with AAco.

He also declined to comment on previous reports that Australian Agricultural Company had initially wanted $40 million compensation.

"I think it's best left to discuss what we did settle on, rather than what the initial claims were," Mr Jackman said.

"Certainly there have been some big numbers bandied around, but I think more important is the number that we did settle on."

About half the compensation will be covered by Elders' insurers.

AAco declined to comment, saying in a statement that the "matter has been settled in full".