Tasmania's only accredited export sheep and lamb processor says its concerned about its future, after being served with a draft notice threatening to suspend its export licence.
Tasmanian Quality Meats owner Jake Oliver said any federal decision to suspend the licence could cause the Cressy works to close.
That would result in devastating flow-on effects for TQM's 200 workers and the wider agricultural community, he said.
The government alleged the works had breached animal welfare regulations.
"It appears that activists illegally accessed our facility between August and September this year, installing a number of hidden cameras and subsequently providing the illegally obtained footage to the government," Mr Oliver said.
"We were made aware of the footage and on Friday we received a notice of intention from the federal Department of Agriculture, Fisheries and Forestry (DAFF) threatening to suspend our export licence and giving us only seven days to respond."
But it appears TQM is not the only Tasmanian works to come under scrutiny.
Tasmania's Department of Natural Resources and Environment confirmed it received formal complaints on November 27 about slaughter practices and animal welfare at several abattoir operations in Tasmania.
"The department has taken the allegations very seriously and an investigation team was immediately formed to review the evidence provided," a spokesman said.
"Additional evidence is being collected and interviews are being conducted."
The investigation would determine if there had bee any breaches of the Animal Welfare Act, other relevant Acts and Regulations, and if the businesses were meeting their accreditation requirements.
NRE was working closely with the Department of Agriculture, Fisheries and Forestry in relation to any export abattoir.
A DAFF spokesman said export registered establishments were required to have effective controls in place, to enable adherence to export legislation.
"The footage made available to the department does not align with the export legislation," the spokesman said.
"The department is working with the company in relation to the regulatory matters raised."
No further details would be provided.
The allegations come as peak bodies say the vast majority of Australian abattoirs maintained best practice, despite one works in the south-west of Melbourne ceasing their operations while an investigation into an alleged mistreatment of animals was underway.
Mr Oliver stressed the company condemned all mistreatment of animals, in the strongest possible terms.
Such action was utterly unacceptable and failed to meet the high standards TQM expected.
"Upon becoming aware, we took immediate and significant actions, including:
. Appointed an Animal Welfare Officer;
. Increased Quality Assurance monitoring;
. Purchased a new state of the art stunning system and new restrainer;
. Re-trained all employees on animal welfare obligations; and
. Introduced a Zero Tolerance policy - one strike, you're out," Mr Oliver said.
"However, we are deeply concerned that before we've even been afforded due process and a chance to respond to the allegations, we were served a notice from the federal government," he said.
The government had formed the preliminary view a 12-month suspension "would be reasonable," he said.
It comes of calls for the federal government to cut its links with animal welfare charity Animals Australia.
A shutdown would be devastating for families across Cressy and Longford who would be left without an income at Christmas, and would result in the loss of many valuable foreign workers.
"This would also send shockwaves across the sector, including Tasmanian lamb and cattle farms, livestock transporters, finished goods transporters, contractors, packaging suppliers, utility companies and the communities that rely on money we spend right here in Tasmania," he said.
"It will also leave Tasmanian farmers with nowhere to process their livestock, as TQM is the state's only export accredited processor.
"Right now, we have 60,000 sheep and lamb booked in to be processed between now and mid-January, that will grow to around 120,000 by the end of January."
Mr Oliver said Tasmanian farmers would be forced to scramble to find a mainland processor, with many already booked out, and to pay more to ship their stock across Bass Strait.
Tasmanian Farmers and Graziers president Ian Sauer said farmers took the welfare of their animals very seriously and did not condone any form of cruelty or mistreatment of livestock.
"Our understanding is that both commonwealth and state government agencies are investigating the matter, which we think is appropriate and support," he said.
"TFGA is now working with TQM, who have given us firm assurances that processes are in place to prevent any future breaches of animal welfare.
"TFGA believes this demonstrates goodwill on behalf of TQM and their willingness to adhere to best practice."
Mr Sauer confirmed that the TFGA has written to the DAFF outlining its concerns about the broader flow-on effect of any licence suspension.
Tasmania already had a limited capacity to process sheep, which had been exacerbated by the drought conditions in the south of the state, he said.
"If TQM was forced to close, as the draft decision proposes, Tasmanian livestock producers of sheep and lamb would have nowhere within Tasmania to have their stock processed," he said.
"Many farmers will have no choice but to euthanise their animals on farm.
"This loss of income will cripple Tasmanian farmers, who are already struggling with high interest rates, low livestock prices and the current dry season.
"In short, it would be an unmitigated disaster for Tasmania's agricultural sector," Mr Sauer said.
Tasmanian Primary Industries Minister Jo Palmer said the government expected abattoirs to uphold the highest of animal welfare standards.
"I have been advised that TQM have undertaken a range of measures to ensure they meet those standards," she said.
"I would hope the commonwealth affords TQM due and fair process, acknowledging the impact any decision would have on Tasmanians jobs, farmers and livestock."