Suppliers were told the retailer had calculated the lost profit from its "order prediction system".
They were asked to confirm they were willing to meet the amount specified, and informed that payment was expected within 30 days.
Most of the major suppliers say they will refuse to pay. They claim they were not responsible for the trade disruption and that the recall was ordered by government.
In a statement, Tesco said: "Tesco Ireland [was] following normal industry practice on product recalls by exploring options with its suppliers to recoup some of its losses. It should also be made clear this letter was sent out to the processors ahead of any details on a Government compensation scheme."
But it is not the only retailer accused of making "unreasonable demands" on suppliers as a result of the recall. According to the Irish Business and Employers' Confederation, retailers are asking to be compensated for the cost of customer refunds, the cost of collecting, handling, storing and transporting the returned product and cost of cancelled promotions. Government officials are to meet Retail Ireland to discuss the claims.
Meanwhile an Irish parliamentary committee investigating the dioxin scare has been told that the government's €180m compensation package for the industry will not be sufficient to cover all costs involved. The secretary general of the Department of Agriculture, Tom Moran, said additional costs might have to be met through a levy.
He told the committee that more than half the 130,000 pigs given the contaminated feed had been slaughtered, and work would start soon on the slaughter of 4,500 cattle.