Stalls at Melbourne's Queen Victoria Market continue to sell items containing animal fur, almost a year after an MP exposed the practice and the state government investigated.
Forensic tests conducted in March found stalls were selling clothes and other items labelled as containing fox fur when it was the fur of the raccoon dog, an East Asian canine species.
Others unlabelled items were found to contain fox and mink fur.
Animal Justice MP and crossbencher Andy Meddick and welfare group Four Paws first exposed South Melbourne Market and Queen Victoria Market traders for selling goods with animal fur in November last year.
Among the items they discovered was a fur-trimmed jacket labelled as 100 per cent polyester.
Tests confirmed the hairs were from a raccoon or raccoon dog.
The discovery prompted a Consumer Affairs Victoria investigation.
"It is incredibly disappointing that yet another investigation has revealed real fur continues to be sold as fake across Melbourne markets, especially after the Victorian government committed to taking action last year," Mr Meddick said in a statement on Thursday.
"They, along with Consumer Affairs Victoria, have clearly failed to do so."
Mr Meddick said Consumer Affairs Victoria have found no mislabelled items during its investigation.
"Either they aren't taking the matter seriously or aren't looking hard enough," he said.
"The Animal Justice Party and Four Paws have visited these markets only twice, and both times found widespread mislabelling of fur products."
Under Australian consumer law, it is unlawful to make false or misleading representations about products.
Offences carry a maximum penalty of $500,000 for individuals and more than $10 million for companies.
Mr Meddick wants Victoria to become the first state to ban the sale of fur products.
"We know fur is cruel, we know it's unnecessary. Now, what we are learning is that it's also a major threat to the emergence and spread of zoonotic disease," he said.