One of Ruralco's two live export businesses has lost its export licence after dairy cattle tested positively for Bovine Johne's Disease on arrival in Japan.
Ruralco's Frontier International Agri (FIA) exports breeder cattle from southern Australia.
Ruralco said on Friday that FIA had received notice of the cancellation of the licence from the Department of Agriculture and Water Resources.
"While the cattle tested negative prior to departure from Australia, it has become evident that certain preparation and isolation procedures within the supply chain were not adequately followed," Ruralco said.
"A review has commenced and appropriate action will be taken once concluded."
Bovine Johne's Disease is an incurable disease of adult cattle caused by bacteria and is mainly spread through the ingestion of contaminated faeces.
The disease can cause diarrhoea, reduced milk production, weight loss and, eventually, death.
Shares in Ruralco were 18 cents, or 5.22 per cent, lower at $3.27 at 1113 AEST.
Ruralco's other live export business - Frontier International Northern (FIN), which exports feeder and slaughter cattle from northern Australia - is operating as usual.
FIN generated more than 80 per cent of Ruralco's live export sales in fiscal 2015.
The whole of Ruralco's Frontier business contributed $10 million to the group's gross profit of $307 million in fiscal 2015.
