Severnside Provisions is approved for processing bacon, but the company has been processing turkeys in conditions that do not meet the required hygiene standards for food production.
There is no evidence of specific risk to public health from consuming this product. However, it is illegal to supply meat from unapproved premises, said the agency.
Investigations by the local authority are ongoing as to how this meat was processed.
It is suspected that eighteen* tonnes of turkey butterflies were supplied to independent butchers and catering outlets throughout South and Mid Wales, South West and South Central England.
However, there may be distribution to customers not yet identified from the records available.
Eight tonnes have been retained and prevented from entering the food chain by Newport City Council.
*= story updated 23 December to reflect FSA update on tonnage supplied