All food and drink stands at the TT grandstand are registered on the Isle of Man, says the Department for Enterprise.
Departmental member Sarah Maltby MHK made the claims after a number of traders accused the department of ignoring applications from local businesses.
Her department was accused of favouring UK companies and charging too much for local businesses to afford, but on Facebook she said although seven UK businesses will sell branded merchandise during this year's festival, all food and drink pitches went to Manx-registered businesses.
Winning applicants were told their bids had succeeded on Monday, and they have until February to accept the plots.