VICTORIA'S meat and seafood regulator has been questioned at a parliamentary inquiry over its ability to work with smaller businesses.

PrimeSafe chief executive Brian Casey and chairman Bill Bray were probed about their operations by the Rural and Regional Committee in Melbourne yesterday as part of an inquiry into the impact of food safety regulation on farms and businesses.

Mr Casey was asked to shed some light on closure of Trafalgar's LE Giles abattoir last November due to animal welfare concerns and the regulation of yabby production in light of Victorian Civil and Administrative Tribunal action against PrimeSafe.

The chief executive began his address by saying the State Government was responsible for deciding which businesses were regulated by PrimeSafe while PrimeSafe just controlled the regulatory framework.

"We only apply the minimum interference necessary to ensure compliance with regulation," he said.

Rural and Regional Committee member and Nationals MP Damien Drum said many businesses were "complimentary" of PrimeSafe's operations saying the regulator had made them more efficient.

But some smaller producers had been scathing.

Referring to PrimeSafe stoushes with a gourmet chicken producer, yabby famers and the owners of LE Giles abattoir, Mr Drum said some businesses had labelled the regulator "distant, hard to engage and not overly helpful”.

Geelong member Ian Trezise said some businesses found to be non-compliant with PrimeSafe regulations had complained of being threatened with closure but given "hardly any advice" of how to comply with the concerns.

Mr Casey said only businesses that were non-compliant with food safety regulation came under PrimeSafe scrutiny, noting closure of businesses only occurred in extreme cases.

He said there were "plenty of examples" of collaboration with businesses who failed to meet regulatory standards, but was unable to name any for the inquiry.

The chief executive said PrimeSafe's main concern was helping businesses identify and prevent food safety problems in the long term.

"For businesses who struggle to comply, the problem is often the operator - it doesn't know anything about food safety," he said.

"It's simply a matter of finding someone who can run that side of the business. It's not for us to say how you run your business."

On the topic of LE Giles abattoir, Mr Casey said the Giles family had asked PrimeSafe to cancel their licence but later asked the regulator to renew it.

After seeking legal advice, PrimeSafe declined and the Giles family took the matter to VCAT, later withdrawing the action.

Mr Casey said animal welfare problems – outside the food safety regular's jurisdiction – would only raise issues with PrimeSafe if they revealed something wrong with the business that could threaten public health.

The chief executive also said defended PrimeSafe's yabby regulation, which strictly stipulates that yabbies must be purged in fresh, clean water before they can enter the food chain.

"Purging in fresh water is the best method – it's the method imposed by Yabbies Australia," Mr Casey said.

"We set out the simplest way to comply with regulation."

PrimeSafe's recently released annual report, which revealed a jump in board payments and raised questions over the regulator's $2.8 million term deposit, was not discussed at the inquiry.