Once diners taste the sweet, creamy parcels – eaten grilled, pan-fried, steamed or even raw – "they refuse to eat other, certainly imported, products," Wisby says.

But many consumers are denied that choice after the Senate this month rejected a push to force restaurants, cafes, pubs and takeaway shops to disclose if their seafood is local or imported.

Independent senator Nick Xenophon introduced the bill after a Senate inquiry recommended the measure for cooked or pre-prepared seafood. Proponents say it would have enabled diners to support the Australian seafood industry and know their meal was clean, sustainable and legal.

Xenophon said the government, which sided with Labor to defeat his bill, was "weak and indecisive" on the issue.

"They have taken the lazy way out … consumers and the Australian fishing industry expect better from our government," he said.

Seafood consumption in Australia has doubled since 1975 and about three-quarters of it is now imported.

This is despite research in 2006 showing about 70 per cent of Australian consumers prefer local over imported seafood.

Australian medical experts have expressed concern over the amount of Asian fish imports containing banned antibiotics.

The Senate inquiry heard some fish and chip shops were selling imported shark, known as "flake", potentially derived from threatened species or from unsustainable or illegal fisheries.

Restaurants using terms such as "fish of the day" did not indicate where the fish was from and may have led customers to believe it was locally caught, the inquiry heard.

Producers warned a "tsunami of barramundi" would hit the domestic market this year from countries including Saudi Arabia, Vietnam and Indonesia.

During Senate debate, Liberal senator Michaelia Cash said country-of-origin labelling changes must be undertaken in cooperation with states and territories.

Xenophon rejected that argument, saying the government could have found ways around the hurdles.

Industry groups are pushing state governments to improve seafood labelling, hoping to emulate the Northern Territory which introduced such laws for restaurants and other dining venues in 2008.

A spokesman for Industry Minister Ian Macfarlane said the government was reforming country-of-origin food labelling in the retail sector after careful consideration including market research and consultation.

The government would review the scheme after two years, and may consider extending it to the services sector, he said.

Wisby said consumers have the right to "know what they are putting in their mouths".

"We also need to know so [consumers] can support local businesses, local employment and economic growth," she said.

"If you buy something that's caught in Australia you know it's well managed and sustainable for the future."

By the numbers

75 per cent the proportion of seafood consumed in Australia thought to comprise imported fish and fish products

70 per cent the proportion of Australian consumers who prefer local to imported seafood, according to 2006 research

90 per cent the proportion of Australians more likely to buy food labelled "Made in Australia"

$2.26 billion Australian fisheries production in 2010-11

Source: Senate inquiry report into current requirements for labelling of seafood and seafood products.