It said it was taking the action after the traces of horse meat were found in beef bought from a supplier in central Spain. Nestle said it was taking legal action against the company, adding that the products would be replaced by ones with 100 percent beef.
Some EU member states are pressing for tougher labeling rules to regain consumer confidence.
The 27-nation bloc must agree on binding origin disclosures for food product ingredients, starting with a better labeling of meat products, German Agriculture Minister Ilse Aigner said.
"Consumers have every right to the greatest-possible transparency," she insisted.
Austria backs the German initiative; but others like Ireland say existing rules are sufficient although Europe-wide controls must be strengthened to address the problem of fraudulent labeling.
The scandal has created a split between nations like Britain which see further rules as a protectionist hindrance of free trade under the bloc's single market, and those calling for tougher regulation.
Processed food products — a business segment with traditionally low margins that often leads producers to hunt for the cheapest suppliers — often contain ingredients from multiple suppliers in different countries, who themselves at times subcontract production to others, making it hard to monitor every link in the production chain.
Standardized DNA checks with meat suppliers and more stringent labeling rules will add costs that producers will most likely hand down to consumers, making food more expensive.
The scandal began in Ireland in mid-January when the country announced the results of its first-ever DNA tests on beef products. It tested frozen beef burgers taken from store shelves and found that more than a third of brands at five supermarkets contained at least a trace of horse. The sample of one brand sold by British supermarket kingpin Tesco was more than a quarter horse.
Such discoveries have spread like wildfire across Europe as governments, supermarkets, meat traders and processors began their own DNA testing of products labeled beef and have been forced to withdraw tens of millions of products from store shelves.
More than a dozen nations have detected horse flesh in processed products such as factory-made burger patties, lasagnas, meat pies and meat-filled pastas. The investigations have been complicated by elaborate supply chains involving multiple cross-border middlemen.
Associated Press writers Juergen Baetz in Brussels, Karel Janicek in Prague and Ciaran Giles in Madrid contributed to this report.