Operations at the B&F Meats Plant in Carrick-on-Suir, Co Tipperary, have been suspended after the discovery of horse DNA.
The Department of Agriculture discovered that the plant was sending horsemeat to the Czech Republic, which was labelled as beef.
Minister Simon Coveney has said he is "seriously concerned" about the development and that the department is working closely with the Gardaí in investigating the matter.
Officers from the Special Investigations Unit at the Department of Agriculture have been carrying out searches at the factory this afternoon.
According to the Minister for Agriculture, this latest development is a "labelling issue".
It comes on the same day that Minister Coveney announced new measures for the detection of food fraud.
Fifty extra food samples will be checked for horse DNA next month, under new EU rules.
In addition, a new protocol for testing beef products has been agreed with those in the meat processing, retailing and catering sectors.