TESCO shares took a €300m (€360m) hit today following the discovery of horse meat traces in burgers sold in its stores.
Shares in the supermarket chain were one of the heaviest fallers on the FTSE 100 after the Food Safety Authority of Ireland, which carried out the tests, said the burgers containing horse DNA were produced at two plants here and on in the UK.
The horse meat accounted for about 29pc of the meat in Tesco Everyday Value Beef Burgers.
Tesco said last night it was immediately withdrawing all of its burgers, both fresh and frozen, from its shelves regardless of whether they contained traces of horse DNA.
Analysts said that while the issue is not one of food safety at this stage, there is the issue of consumer trust.
"Whilst there is no suggestion of a food safety issue at this stage, there is an issue of consumer deception and offence, given the deeply different cultural perception of horse meat in the British Isles compared to many other markets," Shore Capital analysts said.
According to Espirito Santo analysts: "Although the FSAI concluded that there was no risk to public health, the news is likely to, at least temporarily, reduce consumers’ trust in the quality of Tesco’s products which is unhelpful at a time when Tesco is trying to rebuild customers’ trust in the quality underpinning Tesco own label and Everyday Value products."