The idea for the product came as a way to rid Tasmanian waters of the fishing pest, as well as use the urchin product Mr Zheng wasn't able to export.

Mr Zheng's stall at the Taste of Tasmania in 2019 was "a great success".

"We did really good, way better than expected," he said.

Mr Zheng said the uptake from the community was beyond measure - with people gathering to listen about the effect sea urchins had on the environment, and try the unique product.

Understandably, Mr Zheng was upset by, but understanding of, the overnight decision by the City of Hobart council to scrap the 2021-22 festival, and remove its ownership of the festival.

Instead, the council's chief executive officer will develop a transition plan to divest the council of ownership, and identify the best way forward that honours the importance of the event.

Hobart Lord Mayor Anna Reynolds said the festival generated around $47 million worth of economic and social benefits to the state each year.

"If the festival was to go ahead this year, it would not be able to meet the high expectations of our community, sponsors, visitors and stakeholders and that could damage the long-term sustainability of the event," Cr Reynolds said.

"The Taste of Tasmania's reputation is too important to risk. Instead, this forced hiatus has given us an opportunity to stop, take stock of what has been successfully built over many years, and take the necessary steps towards a more sustainable future for the festival.

"It was acknowledged that the festival had grown to such a high level of state significance that is was no longer reasonable for City of Hobart ratepayers to underwrite the event."

Mr Zheng said the festival was incredibly important to the region's tourism and hospitality operators.

"It's a big event, which us stallholders rely on for money and for advertising - without it, it will be a challenge," he said.

"Last year when it was cancelled, we were already preparing a large amount of material which we then couldn't sell.

"If we don't have this where we can share our product and educate people, we have less of a platform."

Mr Zheng said he believed all stallholders would agree on the importance of the festival, and he wanted to see it continue on in the future.

Windermere's Native Point Wines have had stalls at previous Taste of Tasmania festivals.

They had not planned on attending this year's festival, but still saw the benefit of the festival as an opportunity to generate business income, effectively market the product to local and interstate visitors, as well as generate visitation to the cellar door afterwards.

Co-owner Tim High said the costs associated with attending the event were quite extensive and took away from the experience for some stallholders. He said he would like to see the event move to a ticketed model, potentially similar to that of Festivale.

"You get a lot of people at free events who go around the stalls and just taste and don't buy anything, whereas at Festivale it's a lot more serious," he said.

"It's not a cheap event to attend either, but it doesn't stop people from going.

"A ticketed event with a model including something like the price of a glass would give people a bit of a benefit too."

He said the costs involved for stallholders at the Taste of Tasmania had led to improvements for patrons, but that adds to the cost which was part of the council's decision.

Mr High also supported the idea of a shorter event.

"Eight days is a really long time when you're constantly on your feet for 12+ hour days serving the public," he said.

"Whatever it takes, if someone steps up to keep it going - we really need events like this," he said.

Visit Northern Tasmania chief executive Chris Griffin said it was early days in the debate surrounding the festival's future.

"It is a significant event for many of our hospitality and food producers," he said.

"It's a definite income spike for many of them, particularly the smaller ones - it's a consideration for many to have a think about, not being in play.

"It really is early days - this doesn't meant the event discontinues, there's opportunity there for private sector or other partners to come in and consider hosting, sponsoring or otherwise supporting a future Taste - and the council always has the opportunity to change its mind given community feedback".

Mr Griffin said he believed anybody in Tasmania would support a renewed model.

"It's not dissimilar to Festivale - it's more of a social and cultural institution than an event," he said.

"We are all beholden to think about its preservation, but also ensure it's sustainable into the future".

Premier Peter Gutwein said the council's decision provided a "good opportunity for renewal" and a refresh of the concept.

"The Government is committed to working with the Council and other key stakeholders on an appropriate transition plan to a new event concept that activates the waterfront during the Christmas and New Year period," he said.