French firm suspected in horsemeat scandal

French meat-processing company Spanghero has been suspected of knowingly selling horsemeat labeled as beef, the coutry's food ministers said Thursday.

"The investigation shows Spanghero knew the meat labeled as beef could be horse. There was a strong suspicion," Consumer Affairs Minister Benoit Hamon said.

"It would seem that the first agent in this chain to label the meat beef was indeed Spanghero," he added.

Based in the southwestern town of Castelnaudry, Spanghero was accused of "economic fraud" and "will be pursued," Hamon stressed, promising "to clean up the industry."

According to the investigation, the domestic processing firm registered a profit of 550,000 euros (733,650 U.S. dollars) over six months by selling cheap horsemeat labeled as beef.

It risks paying a fine of up to 187,500 euros and a jail for key company executives.

In a joint press meeting, Agriculture Minister Stephane Le Foll said the government was considering withdrawing Spanghero's operating license.

"An investigation will be launched to see whether this license will be permanently suspended or not," Le Foll said.

He also emphasized the need "to improve labeling on processed products by indicating the origin of meat."

The recent horsemeat scandal broke after frozen food group Findus in France last week recalled lasagne and two other products after discovering it was 100 percent horse meat from Romania rather than beef from France.