The sign was posted in the window of local butchery Rapley’s Midtown Quality Meats.
The sign read: “Eating two strips of Rapley’s award-winning bacon for breakfast reduces your chance of being a suicide bomber by 100 per cent.”
It has been reported that since he posted the sign, bacon sales had increased to the point that he was nearly out of stock.
The butcher behind the sign, Jeff Rapley told The Daily Mail he didn't mean to offend anybody and the reaction had "gotten out of hand".
Rapley originally told the Narooma News that he wasn't a racist and that he even employed a Muslim assistant.
“I’m definitely not a racist and didn’t mean for it to cause offence,” he said.
Rapley also noted the sign didn't mention any particular religion - as though offending multiple groups removes the racist title.
The photo has gained a huge response on social media and to a large extent it's in the butcher's defense.
The Facebook post of the original news story by Narooma News attracted a huge amount of support for Rapely as comments echoed the sentiment "the only people this sign may offend are suicide bombers."
One Facebook commenter who defended the butcher identified themself as being from the town where the sign had been posted.
"Where is the offence surely we can still have a sign at the front of our businesses without hype that they cop in Sydney or other cities.We are a small town don't let big brother bring their rubbish here we don't want it," they said.
Another user said they considered the sign as incentive to purchase.
"I'll buy 1 tonne of bacon from him now, because I don't want to be a suicide bomber. And also I love bacon," they said.
One commenter who said they were "glad" to have "moved away" was mocked by several other users for her lack of support.
"Yes. Narooma is glad too," one user said.
The battle about whether the sign is offensive may continue to rage on but it was removed after a local resident complained.
Watch as Mamamia staff share their own love for one of Australia's favourite meats.