Existing food standards require packaged food to be labelled with information on where it was made or grown, but exempt most cooked and pre-prepared food sold in restaurants, pubs, cafes and takeaway shops.

The committee's recommendation that this exemption be removed has been welcomed by the "Australian made" and "label my fish" campaigns, but has been criticised by the latter for stopping "short of recommending labelling of species name and production method which is vital information for making a sustainable, healthy choice".

Restaurant and Catering Australia has opposed changes to labelling laws and estimates that the cost of printing new menus will be between $8000 and $10,000 per business. It has previously said that the industry would lose $300 million a year in complying with such requirements.

However, surveys of Northern Territory retailers, which have been required to label imported seafood since 2008, found that ongoing compliance costs are between $100 and $500 per annum for individual retailers and one-off transition costs were $500 to $5000.

"The simple addition of a few words to restaurant and outlet menus and chalk boards was not a prohibitive cost," the Australian Prawn Farmers Association told the Rural and Regional Affairs and Transport References Committee.

Further surveys on the Northern Territory laws considered by the committee found that "there was not only a high level of consumer support ... it was also generally supported by the food services sector".

The recommendation is part of a report into whether current requirements "provide consumers with sufficient information to make informed choices" and if labelling laws disadvantage domestic seafood producers.

About 75 per cent of seafood consumed in Australia is comprised of imported fish products but 90 per cent of Australians are more likely to buy products labelled "made in Australia", the committee found.

The government is expected to respond to the recommendation by March next year.