The RSPCA has suspended its certification of a salmon company as part of an investigation into footage showing workers sealing live and dead fish in a bin.
The industry in southeast Tasmania is in the grips of an unprecedented mass mortality event that resulted in 5500 tonnes of dead salmon being sent to waste facilities in February.
The island state's environmental regulator revealed the figure on Thursday and said it was investigating salmon companies for potential non-compliance with standards.
Environmental group the Bob Brown Foundation captured drone vision of fish being siphoned into a tub at a Huon Aquaculture facility south of Hobart.
Huon has launched its own investigation into the matter, saying it does not meet company standards or established protocols.
The RSPCA, one of Australia's peak animal welfare bodies, on Saturday announced it had suspended Huon's approved certification for 14 days while further inquiries were undertaken.
The certification is granted to companies and guarantees animals have been farmed with consideration of their welfare.
The RSPCA said Huon had breached certification standards relating to euthanasia, including a provision that fish must not be left to die in air.
"The inhumane handling of live, sick or injured fish as shown in the video being circulated is completely unacceptable," the RSPCA said in a statement.
"As the public response to this incident shows, animal welfare in farming is incredibly important to Australians, and this is no different when it comes to aquaculture.
"Fish are sentient animals capable of pain and suffering, which is why the RSPCA approved standard exists in the first place."
"We will continue to follow our established processes in relation to this matter and will have more to say in due course.
Huon said it was participating fully with the RSPCA investigation.
In normal operations, dying fish were very rarely pumped during mortality retrieval, and humane euthanasia procedures were followed if necessary, the company said.
"Since the start of this unprecedented disease outbreak, Huon has been transparent with regulators and the community and will continue to engage proactively," Huon's manager of stakeholder and government relations Hannah Gray said.
The Bob Brown Foundation has called on the RSCPA to permanently remove Huon's certification.
"There is absolutely no focus on welfare in these factory farms of the sea," foundation campaigner Alistair Allan said.
"Farmed salmon are crammed together and left to suffer as they all get sick and start to die."
Industry body Salmon Tasmania on Friday issued an apology for the mass deaths, saying companies were doing everything to fix the situation and would "make changes" in future.
A marine bacterium Piscirickettsia salmonis and unseasonably warm waters are to blame for the mass salmon deaths.
The environmental regulator says the bacteria is endemic to east and southeast Tasmanian marine waters, only impacts salmonoids and poses no risk to people.
