The alliance says the industry has been hurt by recent bad publicity from a series of investigative stories "after years of operating in the shadows".
While groups such as the alliance have long campaigned to end the slaughter trade, the industry now faces pressure from soon-to-be-enforced tighter European Union rules centering around the drug histories of horses intended for slaughter for human consumption.
The rules stipulate that any horse that has received the common anti-inflammatory phenylbutazone cannot be slaughtered for human consumption.
Slaughter plants and kill buyers are likely to have serious problems proving that is the case for many of the tens of thousands of horses bought at auction for slaughter.
The alliance, in its latest attack on the industry, pointed to the release of a report issued by GAIA, a Belgium animal welfare organisation, in partnership with Animals' Angels USA.
The GAIA report challenged marketing material showing horses raised on pristine pastures and living stress-free lives.
Its material documented the "torment" of horses at every stage on the path to slaughter, the alliance said.
Animals' Angels executive director Sonja Meadows said: "As soon as we realised that European Commissioners and consumers themselves are unaware of the extreme suffering of horses in the slaughter pipeline, Animals' Angels shifted gears to focus on where the meat really comes from."
Other material pointed to by the alliance included a 900-page photographic report from the United States Department of Agriculture in 2008, showing hundreds of violations of humane handling regulations at Texas plants; an undercover video from a Mexican slaughter plant; and hidden camera reports from three separate Canadian slaughter plants released by the Canadian Horse Defence Coalition (CHDC), two of which were released just weeks ago.
The CDHC's Sinikka Crosland said: "Horses were beaten, electric-prodded and subjected to high levels of noise and anxiety-provoking stimuli. Mis-stuns with a .22 rifle occur frequently, with some horses hoisted while still fully conscious. It is now abundantly clear that horse slaughter in assembly-line situations cannot be humanely conducted."
The alliance also pointed to study recently published study in the journal Food and Chemical Toxicology which back-traced 18 slaughtered racehorses and found 100 per cent had been given phenylbutazone.
The alliance said the recent Belgium revelation saw supermarkets respond with promises to investigate. One large Belgium retailer asked its supplier to remove the meat from its shelves.
Two other major grocers told consumers they did not import horse meat from outside Europe.
"The impact is expected to further damage a crumbling market," alliance representatives John Holland and Vicki Tobin said.
The industry's woes began with the closing of the three US slaughter plants in 2007, but the plants shifted their operations to Canada and Mexico.
In 2008, 134,159 US horses were exported to slaughter - the second-highest total in 10 years.
US slaughter exports dropped by 20 per cent in 2009, and year-to-date by yet another 12 per cent.
The alliance said horse welfare advocates had warned of the drug issue and the "revolting cruelty of horse slaughter".
"Perhaps now that the massive disinformation campaign being waged by slaughter proponents has been exposed to the consumers, Congress will wake up and stop the flow of US horses," the alliance said.
"The lies and manipulation of the facts by slaughter proponents has come home to roost," Tobin added.
"It is time they step up and start addressing the excess horses they continue to produce every year instead of sweeping it under the carpet by slaughtering the victims."
The alliance is an umbrella organisation with more than 100 member organisations. It focuses efforts on the welfare of all equines and the preservation of wild equids.
Report on the GAIA investigation: