Moruya Business Chamber fears the promised Moruya bypass could hurt small businesses if the area is not developed into a "destination town".
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At the June 25 council meeting, Moruya Business Chamber president Jude Manahan raised concerns the bypass would take away visitors during winter, when retailers relied on passing traffic and spontaneous decisions to stop at cafes and shops.
She said businesses did not generate a lot of money during winter.
"(Roads and Maritime Services), through the building of a bypass, will create an anticipated massive negative impact on Moruya small retail businesses," Ms Manahan said.
She said Moruya would be the only town drivers would bypass on the South Coast between Nowra and Bega.
However, Councillor Maureen Nathan said the effect on businesses after the initial disruption would be positive.
Ms Manahan disagreed and said Berry had successfully dealt with a bypass because it was a destination town to start with.
She said she had been told the town of Bega took 12 months to recover after its bypass was built.
"Twelve months is quite an impact on small businesses," she said.
In March, Bega MP Andrew Constance and NSW Premier Gladys Berejiklian announced the state government would spend $960 million duplicating sections of the highway between Jervis Bay Road and Sussex Inlet Road, building the Moruya bypass, planning for Milton and Ulladulla bypasses and on highway upgrades from Burrill Lake to Batemans Bay in the next term of government.
Ms Manahan was concerned Moruya might not be able to develop its own identity to attract visitors to the town by the time the bypass was built in this term of government.
"It's a short period to start working out who we are and creating a destination town," she said.
"The chamber, in representing small business in Moruya, needs to be aware and kept up-to-date with advancements in the project.
"We ask that a council and chamber joint bypass strategy sunset committee be formed, through which we can address issues and develop the potential benefits."
Cr Anthony Mayne said the decision to build a bypass was "out of the blue".
Mayor Liz Innes offered to meet chamber representatives to discuss their concerns.
