Businesses in Franz Josef are against a plan by Westland District Council to rezone half the town's commercial area because of earthquake fears.
The council wants to stop further development on land directly above the alpine fault, because it says if there is an earthquake, any buildings will almost certainly collapse.
Under the plan, the business owners will be allowed existing rights but will not be able to expand or develop their properties in any way.
Supermarket owner Chris Roy says the value of about 40 businesses will be destroyed by the rezoning.
The council says it has to act because no building directly on the fault would be able to withstand a major quake.