Animal activist group Farm Transparency Project captured footage at Tasmanian Quality Meats (TQM) in August and September after installing hidden cameras.
The group alleges it shows calves being slaughtered without being properly stunned and instances of workers kicking, whipping, beating and throwing calves and sheep.
TQM operations manager and owner Jake Oliver said the company had last week been served with a draft notice from the federal department of agriculture threatening an export ban.
"I've seen the video and we condemn all mistreatment of animals," Mr Oliver told reporters.
A video taken at Tasmanian Quality Meats has raised issues of animal cruelty. (HANDOUT/FARM TRANSPARENCY PROJECT)
A federal department of agriculture spokeswoman said the footage they received "does not align with the export legislation".
"Export registered establishments are required to have effective controls in place to ensure practices occurring at the establishment enable adherence to export legislation," she said.
"The department is working with the company in relation to the regulatory matters raised.
"It is not appropriate that further details on this issue be provided as it is a matter for the department and the entity it regulates under the Export Control Act."
TQM is the state's only export accredited processor and can handle up to 17,000 lambs, mutton and bobby veal per week.
Farm Transparency Project director Chris Delforce said footage showed "dozens of calves being killed without stunning" and one "drowning in blood after being dropped onto the floor while still conscious".
The group said it also had footage of animal cruelty at other Tasmanian abattoirs.
Mr Oliver, who said he became aware of the footage last Thursday, said TQM had taken immediate steps including appointing an animal welfare officer.
He said there was now increased quality assurance monitoring, a new stunning system, a "zero tolerance" policy and all employees had to be re-trained on welfare obligations.
He said employees identified in the video had been moved to roles away from animals.
Mr Oliver said the suspension of TQM's export licence could force the company to shut down, placing 200 jobs at risk.
He said TQM had asked for an extension to reply to the draft notice of suspension.
"I'm not denying it needs to be investigated," Mr Oliver said.
"We want a fair go. It's happened. We've fixed it.
"We want to cop the penalty but don't penalise our farmers, our employees, their families coming up to Christmas."
Guy Barnett says Tasmania expects the highest standards of animal welfare. (Ethan James/AAP PHOTOS)
Tasmanian Farmers and Graziers Association president Ian Sauer said an export suspension would create an ever bigger animal welfare issue.
"If TQM aren't killing these lambs, there's nowhere for them to go," he said.
"There's limited capacity for freight across Bass Strait, there's limited capacity for killing animals on the mainland at the moment."
In a letter to the federal government, Mr Sauer said TQM's closure would be "an unmitigated disaster" for Tasmania's agricultural sector.
He said he hadn't seen the footage taken inside the abattoir but people had told him it was horrific.
State government MP Guy Barnett said Tasmania expected the highest standards of animal welfare.
"(But we) would request the federal government understand the implications of any such decision on jobs, farmers and livestock," he said.
The state Greens have called for an immediate investigation into all Tasmanian abattoirs, including seizing and reviewing CCTV footage.
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