Three horses' heads are displayed above a horse meat butcher shop in Paris.
Meat from horses used in laboratory procedures was illegally sold as fit for human consumption and landed on French dinner tables, authorities said on Monday.
Police, food safety and veterinary investigators carried out pre-dawn raids in 11 regions around southern France, arresting 21 people. The complex case raised new concerns about how this country, with its rich culinary reputation, polices its food supply.
Marseille Prosecutor Brice Robin said the animals had been used in laboratories - including that of drugmaker Sanofi-Pasteur - and then, instead of being destroyed, ended up in the food chain. He said Sanofi-Pasteur correctly labelled its meat, and "considers itself a victim" in the case.
The prosecutor said he has no proof so far that the horsemeat was toxic, just that it wasn't supposed to be sold as meat at all.
He described a network of veterinarians, computer experts and others who allegedly worked together to falsify documents. He said investigators have identified at least 100 horses that had been certified as "unfit for consumption" after the lab work, but whose papers were doctored to read "fit for consumption" instead.
The horses were exported to Spain among other countries, the prosecutor said, without naming the others.
Sanofi told Le Parisien newspaper on Monday that the horses were used to create antibodies against rabies and tetanus among others. The company, which said it cooperated in the investigation, said it has resold about 200 horses in the past three years to vet schools, individuals and professionals.
The company said the lab uses horses for about three years before re-selling them, tagged and certified. It said it does not carry out testing on the animals, only makes lifesaving medicines.
Benoit Hamon, France's consumer affairs minister, told RTL radio, "These were horses that should have ended up at the slaughterhouse, and instead they ended up at the butcher."
He drew a sharp distinction between Monday's raids and a scandal earlier this year in which inexpensive - but edible - horse meat was passed off as beef and sold in supermarkets and restaurants around Europe.
"There are horses that should end up neither on your plate nor at the butcher, and that's the work of this investigation," he said.