Animal activists have secretly filmed horses being shot at a knackery, a fate shared by an estimated 10,000 racehorses around the country each year.

The majority are used for pet food, and horse sales around the country are attended by meat buyers.

Welfare groups say racing has an appalling attrition rate and more needs to be done to find a suitable life after the track for thoroughbreds.

Ward Young from the Coalition for the Protection of Racehorses says he believes it shows the racing industry are not animal lovers.

"The racing industry can't stand up and say they love these horses and then the next day when they can no longer earn money at the races get a bullet in the head and be killed for dogmeat," he said.

"It's just unconscionable that this industry tries to portray itself as animal lovers when in fact its actions speak much louder than words when its actions say the complete opposite."

At the Echuca sales this month, about 100 horses were sold at auction, including failed racehorses.

The sales can still become a dumping ground for injured racehorses.

But auctioneer John Moyle says the sales do not solely rely on knackers to buy the horses.

"We would go broke if we relied on the knackery to support our business," he said.

"The knackery would say the same thing. They would only buy between 10 and 20 per cent of the horses that we process through here."

'Wastage'

There are currently about 15,000 thoroughbred foals born every year. The industry calls the number of horses lost to racing each year "wastage".

Hugh Wirth, the Victorian president of the RSPCA, says the racing industry is breeding too many horses.

"We are breeding lots and lots and lots of horses," he said.

"Some of them fall by the wayside for things that should never happen and that causes wastage."

While a Clydesdale cross can sell for thousands of dollars in the main ring, racehorses in the rear saleyards can fetch much less.

Rachel Beatson bought a horse at the Echuca sales for just $300.

"The breeder came up to me and had a chat to me and said she raced a week ago in Wodonga and came 400 metres behind last place," she said.

"She's pretty slow. She's not born to be a racehorse... I knew I had to take her home. She's just gorgeous."

Ms Beatson says the horse would have been turned into dogmeat if she had not bought her.

"Dogmeat man was bidding against me and I said: 'I'm just going to keep going, so you might as well stop, buddy'."

New home

But finding a new home for a thoroughbred is easier said than done. They cost between $50 and $100 per week to keep and are often difficult to handle.

Bill Saunders runs a racehorse retraining program west of Melbourne and has found new homes for 50 former racehorses in the past two years.

"A lot of horses are often quite frazzled by racing," he said.

"You find that they quite often need two or three months to come down out of the clouds and eat some grass and generally get used to being a horse again.

"Some of them are quite badly injured or really difficult in the head in terms of being quite mad, and those horses are probably better off put down. But of the ones that are left, many are very suitable riding horses and a lot of them do go out and do exactly that.

"We've had many owners here where owners have been prepared to pay money to get the horses retrained in order to give them a good home. Unfortunately it's not as widespread as I would like it to be."

Room for improvement

While it is difficult enough to re-home a racehorse, about a third never even reach the track.

Mr Wirth says about 8,500 are excluded from the racing industry at an early age.

"[It's] usually due to injury, mostly due to injury, due to the fact they are prepared for racing when they were juveniles and not mature in bone and limb," he said.

Racing Victoria admits there is room for improvement and is considering an owners' levy as part of a new strategic plan on horse welfare.

Mr Young says something must be done.

"The racing industry needs to realise by breeding these animals and by profiting from them while they're racing, they owe a responsibility to that animal to look after it for its entire life, not just its life while racing," he said.

"We believe that a superannuation fund, if you like, needs to be established, so part of the prize money that a horse earns and other horses earn is contributed to ensuring that horse doesn't go to slaughter when it can no longer earn money."