The world's largest tea tree plantation has been sold to a forestry company.

Main Camp, near Ballina on the New South Wales north coast, has been taken over by Great Southern Plantations and 55 million tea trees will now be replaced by hardwood.

Main Camp owner Fred Gulson says it was a tough decision to sell and to survive, the industry must re-think the way it does business.

"It's just a question of determining what is the highest and best use for an asset and we drew that decision some months ago, and we realised it," he said.

"You're asking me how the industry should behave and if they want to play in the industry, they've got to start competing on things other than price."