Some community groups have been barred from selling alcohol at this year's National Multicultural Festival under a stricter licensing regime pitched by ACT Policing.

The number of liquor licences issued has been slashed from 65 to 21, which some volunteers claim is a move designed to benefit big clubs.

Territory police recommended the change in a review of last year's festival, despite taking just three people into custody for intoxication out of a crowd of 280,000.

In previous years, cultural organisations have been able to apply for a temporary permit to sell alcohol at the festival, often selling their country's local product.

But Multicultural Affairs Minister Rachel Stephen-Smith said that would not be happening this year's event.

"The ACT Government places great importance on the [festival] being a safe environment for all, including families and children," she said.

"A small number of community organisations may be affected by these changes."

Move aimed at curbing public safety risk

The ABC spoke with one community organisation which described the move as favouring larger clubs that contribute more to the festival.

Leo Dobes, a regular volunteer at one of the stalls, said this was an issue made up to benefit big licensed clubs at the expense of smaller stallholders.

"They contribute much more money to the festival organisation," he said.

"They're going to be allowed to sell alcohol.

"That to me just smacks of looking after the big end of town rather than making it a festival which is open to everybody."

But Ms Stephen-Smith encouraged those denied permits to partner with licensed stallholders, such as those larger clubs, to sell alcohol on their behalf.

"The festival's policies and procedures are reviewed annually and any concerns raised by community organisations will be taken on board," she said.

In that review process last year, ACT Policing first suggested the number of permits be restricted to curb any potential risk to patron safety, despite police saying they were "pleased" with crowd behaviour during both the 2016 and 2017 festivals.

Last year in addition to taking three people into protective custody for intoxication, police also fielded four reports of theft, and three assaults.

Police Minister Mick Gentleman said police advice was based on a lack of responsible service of alcohol qualifications.

"Police only raised concerns about the responsibility of those that are serving alcohol in the area," Mr Gentleman said.

"And of course they provide advice to all of our agencies in ACT government on particular circumstances, this one was simply in regard to the training and responsibility for those outlets."