The Swiss government has said it will pay about half of the SFr1.3 million ($820,000) costs related to the mistaken distribution of genetically modified feed.
Last year, the federal testing laboratory at Posieux in canton Fribourg wrongly attested that 1,000 tons of fodder were free from genetically-modified soya.
The fodder was later used to feed animals in farms from which the Migros and Coop stores bought meat and eggs for their organic labels.
Once the lab mistake was uncovered, both stores were forced to sell the products under conventional labels at lower prices. The faulty fodder was withdrawn from the market.
A spokesman for the Federal Agriculture Office, Juerg Jordi, said the SFr1.3 million cost took into account the withdrawal from the market and the losses the retailers incurred.
Jordi added that an out-of-court settlement had been reached in which the government, the importer, the animal feed producer and the two stores would contribute to the costs of rectifying the damage.
The fodder, which originated in Argentina, was first tested in August 2000 and was found to contain 1.7 per cent genetically modified soya - below the 3 per cent tolerance level in Switzerland - making the feed suitable for the market.
A second round of tests in February 2001 found the fodder to contain not 1.7 but 17 per cent genetically modified soya.
swissinfo with agencies