The world's biggest food company, Nestle, has removed beef pasta meals from shelves in Italy and Spain after tests revealed traces of horse DNA.
The Swiss-based firm has halted deliveries of products containing meat from a German supplier.
Nestle is the latest in a string of major food producers to find traces of horsemeat in beef meals, the BBC reports.
A spokesperson for the company said levels of horse DNA were low, but above 1%. Last week, Nestle said its products did not contain horsemeat.
Meanwhile, French company Spanghero, accused of re-labelling horse meat as beef before selling it to be used in ready meals, has been given permission to resume some operations.
Spanghero will be allowed to produce minced meat, sausages and ready-to-eat meals, but not to stock frozen meat.
France last week suspended Spanghero's licence, accusing the firm of knowingly selling horsemeat labelled as beef.
The BBC reports Spanghero denies the allegation. Company managers continue to insist they were duped by middlemen.
''I have decided to restore the licence for ready-meals, minced meat and sausages," Agriculture Minister Stephane Le Foll said on Monday.
"At this point, 80% of the entire meat stock have been verified, the work continues for the remaining 20%. The full report will be published on Friday."
Meanwhile, union leaders are due to meet government officials on Monday to discuss the situation. Spanghero is a major employer in the Castelnaudary region, where unemployment is high.
The scandal over mislabelled horsemeat has affected at least 12 European countries.
It began in Ireland when horsemeat was discovered in frozen beef burgers on 15 January this year. However, the scandal widened when tests on beef lasagne made by the Findus frozen foods group showed the product contained up to 100% horsemeat.