The Bluff Oyster and Food Festival has been cancelled due to the threat of Covid-19 outbreaks and rapid changes to traffic light settings.
Festival Chairman John Edminstin said it would be "irresponsible" to host the event, considering it would bring visitors from all over the country to Bluff.
"We had hoped to be further along with our site developments and if the Club Hotel could have been demolished, we would have more space to allow better social distancing," he said.
"Increased compliance costs in a time when events may need to be cancelled after those costs were outlaid in advance were also a factor in the decision."
The festival was due to take place on 21 May and usually draws a capacity crowd to Bluff each year, with last year's event selling out.
Southland District mayor Gary Tong said the committee made a responsible decision in cancelling the festival, but it would leave a big hole in the region's events calendar.
The Bluff Oyster and Food Festival was also cancelled in 2020 after the country went into lockdown.