SÃO PAULO, Brazil – JBS SA suspended all contracts with H.J. Schypke, a German manufacturer of processed meats, after meat produced by the company was alleged to contain traces of horse DNA.

The move came after Nestle S.A. recalled beef ravioli, beef tortellini and frozen lasagna when company tests found horse DNA in all three products in levels above the 1 percent threshold established by the United Kingdom's Food Standards Agency. Nestle said the beef was supplied by Schypke, a subcontractor for JBS Toledo N.V.

JBS said it ended its contracts with Schypke and will not market European meat until "confidence is restored in the European beef supply chain". JBS added that Schypke "is not in any way part of the JBS Group".

"To add flexibility and a just-in-time service to some of its European clients and as a precaution against possible future legal, trade or sanitary barriers, JBS Toledo developed in conjunction with its customer base alternative lines of additional supply from European sources," the company said in a statement. "JBS Toledo´s clients actively participated in the selection process, auditing and approving prospective European suppliers. In this specific case, from the outset of supply, all operational and logistical processes were carried out by the German supplier who delivered the product to the final client."

JBS said no "co-mingling of species" has been identified in JBS products produced at its factories, and no supply contracts have been suspended or interrupted.

"JBS will take all necessary legal measures to assure that no losses will be incurred as a consequence of this isolated occurrence and will continue to serve its customers with quality products, generating value to shareholders and stakeholders alike," the company said.