A French investigation into how horsemeat found its way into ready meals in Europe found that a French processing company called Spanghero sold as beef what could have been horsemeat, the government said yesterday.

“It would seem that the first agent in this chain to label the meat ‘beef’ was indeed Spanghero,” Consumer Affairs Minister Benoit Hamon told a news conference of the company based in Castelnaudry.

“The investigation shows Spanghero knew the meat labelled as beef could be horse. There was a strong suspicion,” he said, arguing that Spanghero could also not have failed to notice that the meat in question was much cheaper than beef. Spanghero denied the accusations and said it firmly believed that what it was selling was beef.

“Spanghero confirms having placed an order for beef, having been led to believe it received beef, and having sold back what it thought was beef, properly labelled as such, in line with European and French regulations,” the firm said.

Agriculture Minister Stephane Le Foll said the government was considering withdrawing Spanghero’s operating licence.

The investigation found the company had made a profit of €550,000 over six months by selling cheap horsemeat as beef, Hamon said.

The scandal erupted when tests carried out in Ireland revealed that meat in products labelled as beef was in fact up to 100 per cent horsemeat. Concern grew last week when the British unit of frozen foods group Findus began recalling its beef lasagne on advice from supplier Comigel after tests showed concentrations of horsemeat ranging from 60 to 100 per cent.