Agriculture Minister Barnaby Joyce won't suspend the live cattle trade to Vietnam despite "barbaric" claims animals are being killed with sledgehammers at local abattoirs.
"Like all these things we investigate it and we decide if we need to take action," he said.
"But we won't be suspending the whole trade," he told ABC radio on Wednesday.
Treasurer Joe Hockey says the matter will be investigated but the government's response needs to be careful and measured.
"You don't close off the food supply to many countries where they have very low income ... on the basis of a single report alone," he told ABC radio in Darwin.
Australian stock 'slaughtered with sledgehammers'
Animal activists are calling for an end to the live cattle trade to Vietnam where they say Australian stock are being slaughtered with sledgehammers.
But the federal government says it won't stop the live trade and the Department of Agriculture is checking if the latest incident relates to other complaints.
Livestock exporters say they are aware of the "cruel and outdated practice" and have taken measures to combat it.
Vision obtained by animal activists allegedly shows cattle being hit repeatedly to the head to stun them before slaughter, or being killed directly by the sledgehammer blow.
Animals Australia is withholding footage of the incident - understood to have occurred in April - from public release because they say it is so shocking.
"Being killed by having your skull shattered by a sledgehammer would have to be one of the most horrific ways to die," a spokeswoman said in a statement.
Traditional method of slaughter
The killing of cattle and buffaloes through repeated blows to the head with a sledgehammer is a traditional method of slaughter in Vietnam.
"When Australian cattle are sold outside approved supply chains, this is the treatment that awaits them," she said.
The RSPCA wants trade to halt while an independent review is carried out, arguing the Vietnamese market has been plagued by problems since it was approved under animal welfare regulations two years ago.
Alison Penfold, CEO of the Australian Livestock Exporters Council, said the report "captures our worst fears for welfare - that Australian cattle have been illegally removed from our supply chains for quick buck processing in non-approved slaughterhouses".
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"No animal should be subjected to the cruel and outdated practice of stunning by sledgehammer," she said.
Australian exporters to Vietnam had put in place additional controls at the end of March to weed out any importers that did not meet Australian standards, she added, including CCTV cameras in abattoirs which could be monitored by exporters.
Two importers had already been placed on suspension by exporters for breaching conditions, Ms Penfold said.
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