Launtel had provided free WiFi to the event for the past three years as part of a services in-kind sponsorship arrangement.

Director Damian Ivereigh said there was growing discontent among sponsors over a process in which long-standing Festivale marketing partners Effective Naturally and Walker Designs were replaced.

In late May, the two Launceston-based marketing companies were told they would need to reapply as part of an Expressions of Interest process, which occurred over a one-week period in early June.

MORE ON FESTIVALE:

The two companies chose not to participate due to insufficient time and information, and Mowbray-based Purpose Marketing and another business submitted briefs for the tender. The selection committee ultimately chose Purpose after analysing the two briefs.

The director of Purpose, Heath Jones, is the fiance of Festivale chairman David Dunn.

Festivale has defended the process as Mr Dunn excused himself from the selection committee due to conflict of interest. The process was independently audited by an individual at KPMG.

All marketing companies were given one week to submit an expression of interest, during which they could not contact the Festivale committee.

But Mr Ivereigh said the two original marketing providers should have been given more time to prepare, particularly given the success of Festivale in recent years including a sell-out Saturday night in City Park.

"If you wanted to make changes about how things were done, wouldn't you go to the existing people and say 'this is what we need, how can we work together to make this change?'" he said.

"Frankly this is not the sort of behaviour we expect to see from the Festivale committee. It may be normal, corporate style, cut-throat behaviour in the major cities, but not in Launceston and certainly not in a community event such as Festivale.

"I think it's outrageous behaviour by the Festivale committee."

On the Purpose Marketing website a message tells visitors "appologies website under construction" (sic) and that a "new digital experience" would be launching in mid-September.

Purpose became a Diamond sponsor for Festivale 2020 along with James Boags, 7 Tasmania, Chilli FM and LA FM, and The Examiner.

In a statement, the Festivale committee said the process was independently audited.

"The entire committee resolved that we should move our marketing to a more integrated service and a tender process was conducted for this," the statement read.

"This was in no way a reflection on the services previously provided by a number of organisations.

"Having received the tenders, they were assessed by a sub committee (which did not include the Chairman David Dunn) and the decision was supported by an independent tender assessment undertaken by an external consultant."

Heath Jones, Effective Naturally and Walker Designs declined to comment.

Festivale 2020 will be held from January 31 to February 2 featuring Eskimo Joe, Vanessa Amorosi and The Whitlams.