About 300 people, some very drunk, gathered on the small Village Green in the town centre on Saturday evening.
Steve Wilde, general manager for lobby group DowntownQT, said the group left a huge mess and other people in the area felt intimidated by the drinkers.
Mr Wilde said his board would push for much tighter restrictions on drinking in public.
‘‘I think you could safely say this gathering has probably sealed the fate of being able to drink in the public streets of Queenstown, permanently,’’ he said.
"We have liquor licensees and events companies who have to jump through the highest hoops in order to serve alcohol to their patrons.
"And yet we can have 300 yobs turn up in the centre of town and create this mess."
"Crate Day" is held on the first Saturday in December to celebrate the start of summer. People attempt to drink a crate of alcohol with their friends.
"Police did have concerns about the uncontrolled nature of the event and the level of intoxication of some of those taking part," Insp Jensen said.
"Additional police staff were called in from Alexandra; however, no arrests were made at the event."
Insp Jensen said there was no liquor ban for police to enforce.
Mr Wilde spoke to Insp Jensen yesterday morning.
"I asked why police didn’t break it up," Mr Wilde said.
"His reply was they didn’t have resources to cope with a riot.
"I understand that, but then I see video of a policewoman playing cricket with the crowd, which essentially endorses what was going on there."
Massive rolling cheers were heard as people completed various challenges, including drinking-related challenges, such as downing a yard of ale — leading to some vomiting.
It appeared generally good natured but drinkers and revellers disgusted locals with the mess they left.
Tourism worker Sarah Moreton said: "I drove past last night [Saturday] and it was just chaos.
"Then, cycling to work this morning, I was absolutely disgusted with what I saw. I was livid, to be honest."
Ms Moreton suggested the CBD festive liquor ban should be extended.
"I don’t want to be a party pooper but we can’t have that. This is a tourist town, one of the most beautiful places in the world, and on the world stage."
Council contractors had cleaned the green by 8.30am yesterday.
Insp Jensen, in his statement, added: "While attending the event, police engaged with those gathered to help maintain order and manage the situation."
He said police would continue to engage with the Queenstown Lakes District Council and business leaders about options for reducing alcohol harm in the community. In Queenstown as a whole, three people were arrested on Saturday night. A 31-year-old had been charged after a serious assault on Camp St at 5am yesterday. One man was taken to hospital. Two other men, aged 26 and 40, were arrested for disorder in separate incidents, the first outside a bar at 2.45am yesterday, the other in a house at 4am. Both were released on pre-charge warnings.
Police responded to several disorder incidents across the country following events organised in relation to Crate Day.Incidents were reported in Southern, Christchurch, Tasman, Waitemata, Rodney and Waikato.
Emergency department doctors are calling for a ban on Crate Day after Waikato Hospital was inundated with drunk patients after Saturday's celebrations, NZME. reported.
The surge, which peaked at 2am, had an ``enormous impact'' on doctors and nurses, and staff described Saturday night as the worst shift they had ever worked, clinical director Dr John Bonning said.
Some intoxicated patients were unconscious and injured, others were still waiting to see a doctor at 8am on Sunday and most of the people treated were aged between 16 and 25, he said.
