A man was arrested by police on Monday after refusing police directions to wear a mask.
The man, understood to be an owner of the Shellharbour Village cafe south of Wollongong, was making coffees while not wearing a mask.
Four uniformed and two non-uniformed officers attended and entered the cafe to speak with the man, while other staff members continued to make coffee and serve customers.
The man spoke to police at length and claimed he had a medical reason not to wear a mask.
He said "it's up to them" if other staff members wanted to wear masks.
One customer began to play Bob Marley songs, while a man carrying a newborn complained that "there's no real men left".
A woman demanded police leave while she recorded them using a baby monitor.
She then hit a camera being held by a reporter and yelled that she did not consent to being recorded.
Other crowd members compared police to Nazis, and yelled "shame".
A sign on the business' window said it "supported people's right to choose," whether to wear a mask or receive a COVID-19 vaccination.
Local businesses said they had been negatively affected by Village Fix's anti-mask stance.
"We're doing the right thing, but no one is coming in to town because of them," one business owner said.
"We've all been tarnished with the same brush."
Locals said they were concerned a vocal minority were giving the village a bad reputation, and adamant anti-maskers made some residents fearful to come into the village.
Police issued a holding statement at 2pm Monday.
"Shortly after 11am police attended a cafe in Shellharbour Village in response to numerous complaints from members of the public relating to a man working in the shop and serving without a mask," a NSW Police spokesperson said.
"Officers attached to Lake Illawarra Police District attended the premises and spoke to the owner.
"Police will allege he refused to put a face mask on despite being asked to do so.
"The 41-year-old man had been warned by police at the weekend to comply with current Public Health Orders.
"He has since been charged with offences relating to failing to wear a fitted face-covering in retail/business premises."
Under the NSW Public Health Order issued on Saturday, masks must be worn inside retail premises, licensed premises and entertainment venues, as well as by hospitality workers whose role requires them to deal with members of the public.
About 9.40am on Sunday officers from Lake Illawarra Police District attended a café in Addison Street responding to reports staff were failing to comply with the current public health orders.
"When officers arrived, they saw neither the staff or the operator were wearing face masks; the operator was reminded of her obligations under the current health orders but allegedly refused to comply," police said.
"The two staff members were warned and complied, putting masks on; however, a 38-year-old woman was arrested.
"She was taken to Port Kembla Police Station where she was charged with fail to comply with notice direction (not wear fitted face covering in retail/business premises), and operator not ensure hospitality workers wear fitted face coverings.
"She was given bail conditions to strictly comply with the public health orders and not to incite or encourage others to defy them and is due to appear in Port Kembla Local Court on Wednesday July 21."