Icecream makers are worried by revelations that the Auckland Council is negotiating a 10-year deal to give Tip Top selling rights at public pools, parks, the waterfront and events.
Rival firms fear being shut out of places like Auckland Domain and the waterfront where icecream sales do a roaring trade in summer.
"Tip Top are going to cream it and take out the opposition in Auckland," said one competitor.
New Zealanders are among the biggest eaters of icecream in the world, getting through an average of 22 litres each every year.
Brett O'Riley, who heads the council's economic arm, says there are no plans to give Fonterra "blanket exclusivity" to sell its Tip Top icecream.
He said artisan producers would still be able to sell their icecream at council locations and events.
Commercial discussions were taking place with other icecream makers, he said, but would not name names.
Fonterra brands manager Peter McClure said this week the company was close to reaching a commercial deal to "give us selling rights for 10 years" for Tip Top icecream.
James Crow and Tommy Holden, who set up their Nice Blocks brand in 2010, said council events were great incubators for small businesses.
They started selling iceblocks at the Big Gay Out.
After making $3,500 in the summer of 2010 their turnover has grown to $750,000 this year.
"This is just a big business deal done with our council stepping on the throats of small businesses trying to succeed in Auckland," Mr Holden said.
Chris Dorn, the New Zealand general manager of Mr Whippy, said a 10-year deal sounded scary. He said council parks and sports fields accounted for a big part of business for the 11 Mr Whippy vans in Auckland.
Mr O'Riley said the Fonterra deal would create more value for ratepayers, but not at the expense of artisan and small producers, whom Ateed was committed to.