More than a decade of investment in the £5bn local food movement could be undermined by government plans to take business support away from the regions.

According to the English Food & Drink Alliance set up last year by eight regional food groups hit when Food from Britain was dismantled in 2008 producers and retailers will lose out if responsibility for the sector returns to Whitehall.

The reorganisation could go ahead as part of plans to abolish regional development authorities, the groups' principal funders, as early as next year.

Jonathan Knight, Alliance chairman and chief executive of the Yorkshire and Humber group, said both retailers and producers would lose out. "A lot of retailers are looking to smaller producers to introduce products quickly. The groups are the knowledge bank for these SMEs. If we were not here, both parties would be trying to find each other in the dark."

The groups, which have a combined membership of 4,000 but work with nearly three times that number, were set up with the aim of becoming self-financing through membership subscription and commercial activity. But many are still several years from reaching their target. Some have already suffered as a result of public sector spending cuts something the Alliance was addressing by sharing information and best practice, while groups were reducing staff and delivering more services electronically, said Knight. "Some have had to move more rapidly to being commercial. Two or three are working with little, if any, public sector support."

The Alliance, which put its case to food and farming minister Caroline Spelman at last week's Yorkshire Show, argues the groups will be critical to the government's 2030 food strategy and that it should keep them as they are and not invent "another bureaucratic process of support". "Unless there is a good conduit from central government to the sector in the regions it will be very difficult to get everybody to up their game," said Knight.