Whitstable Oyster Festival, which attracts tens of thousands of visitors to the Kent town, is believed to have drawn its biggest-ever crowd in 2016.
A Canterbury City Council review of the event identified anti-social behaviour which led to residents feeling unsafe.
Organisers said the problems came from unofficial events in the town.
The festival, centred on Whitstable Harbour, took place from 21 to 31 July.
The council said it had a problem controlling unplanned evening events advertised on social media.
"People were drinking and barbequing late at night on the beach," said Colin Carmichael, the council's chief executive.
"There is a lot of noise that goes with it and smashed bottles.
"It's not terribly pleasant so we just need to make sure that we try to minimise that."
Organisers Event Umbrella, who receive Â£30,000 from the council, said the festival brings Â£2.5m to the local economy.
"On the opening Saturday night there were some incidents within the town, not within the footprint of where we were staging the festival," said managing director Gus Corcoran.
"Over the 10 days of the festival we hosted 60,000 people across numerous events within the harbour and across the town and at none of these events did we have anti-social behaviour.
"Nor did we have a threatening feeling.
"All our staff are trained not to sell alcohol to people who are drunk."
A popular seaside festival is to be heavily scaled back next year after complaints of excessive drinking, litter and fears over security.