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Smoked out: deals in clubland

Tobacco companies are pouring millions of dollars into Melbourne's bars and clubs in return for exclusive agreements to stock and promote their Cigarettes. Hundreds of licensed venues have been receiving secret commissions of $1 to $3 for each packet of Cigarettes sold through vending machines, or up-front payments of up to $100,000 for long-term contracts, a tobacco industry insider has told The Age. Monthly payments known as "packet rebates" were dependent on a venue's location, clientele and ability to accommodate smokers with outdoor areas, according to the source. Quit Victoria executive director Fiona Sharkie called for an immediate ban on cigarette vending machines. Eight bar owners contacted by The Age confirmed the receipt of substantial payments from tobacco companies but all refused to speak on the record because of concerns it could jeopardise their revenue. However, the owner of South Yarra's Chasers nightclub, Martha Tsamis, said she recently negotiated an exclusive contract with British American Tobacco, which will pay $2.80 for every cigarette packet sold on her premises. She said she previously had an agreement with Philip Morris, which paid about $1.40 a packet. "Since the smoking bans came into force, we probably only make between $400 to $500 a month. Virtually everybody has some type of arrangement in place," Ms Tsamis said. The manager of a prominent St Kilda bar said it was standard practice to approach tobacco companies. "The first thing you do when you open a bar is ... approach Philip Morris and see what they offer, get BAT (British American Tobacco) to better it and then go back to Philip Morris. It's been going on for years." BAT has 20 vending machines in the Crown Casino complex, which includes several high roller areas that are exempt from smoking bans introduced last year. The deal is believed to be worth More than $500,000 annually, according to a former tobacco industry executive. Ms Sharkie accused companies of targeting young people in fashionable venues after strict bans on advertising and promoting Cigarettes. With people smoking less "the tobacco industry is ... willing to stoop to new lows to keep people addicted". She said: "These financial deals are a blatant attempt by the tobacco industry to target a younger, More vulnerable market." BAT spokesman Bede Fennell defended the payments, saying: "Like any other manufacturer of a legal product, we have commercial arrangements with our customers and these are commercial in confidence." Crown Casino spokesman Gary O'Neil said such arrangements were standard within the hospitality industry: "Commission payments work in the same way as rent paid by tenants for space in the complex to retail a wide range of products."