In a move that owners claim to be an Australian-first, Belgrave's Sooki Lounge will charge patrons an additional $1 per ticket from upcoming gigs as insurance costs soar.
The live music venue is introducing a public liability levy to offset a massive rise in insurance premiums that have forced the Melbourne bar co-owners Stephen Crombie and Suzana Pozvek into an impossible financial position.
Speaking to Beat Magazine on Thursday, Crombie said Sooki Lounge is the first venue to implement such a measure, but predicted they will be the first of many across Melbourne’s live music scene.
The venue’s insurance costs have skyrocketed from $15,000 to $60,000 ($65,000 including finance) over the past three years, despite maintaining a claims-free record for more than 11.5 years.
Sooki Lounge – Melbourne Bar public liability levy
- Where: Sookie Bar, 1648 Burwood Highway, Belgrave
- When: Implementation begins with upcoming shows
- Levy amount: $1 per ticket
- Insurance increase: From $15,000 to $65,000 over three years
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This represents more than a 300 per cent increase that has pushed the Melbourne bar to breaking point.
“You’ve got lower takings and extremely higher costs and we just can’t cover public liability insurance, while we’re trying to cover everything else,” Crombie says.
“Essentially, it’s just about trying to break even; it’s basic numbers, we need to pay our bills.
“We’ve had to finance this insurance policy for the last three years because we can’t afford to pay it up front.
“That extra dollar won’t cover the whole policy, but it will cover around 20k on rough maths, which brings it back to something that’s not great but manageable.”
Crombie says all venues are struggling with the same crisis as they face lower takings alongside exponentially higher insurance premiums.
“Everyone’s in the same boat too. You’ve got clubs in the city that are uninsured past a certain time, it’s kind of the hidden secret of Melbourne, but it’s definitely coming in right now.
“In our case, only one international insurer would agree to cover a venue of our size, medium/small, and they’re telling these other venues they can only ensure them until 1am or 2am, or for three events a week not five, which means those particular venues are going past that time but aren’t insured.”
The Melbourne bar and live music venue plans monthly transparency posts detailing how the levy offsets costs, with ticket agency Oztix to have no cut in the surcharge collection.
Crombie and Pozvek have exhausted all official channels seeking assistance, approaching state and federal government representatives, Music Victoria, APRA and “everyone in-between” without finding viable solutions.
“We’ve tried everything,” says Crombie.
“Within that policy, $5000 is Stamp Duty (State Tax), $5000 G’S’T (Federal Tax) within the premium, the Government said it wants to help over the years but it does not as it is addicted to its tax.”
“In terms of solutions, I said this years ago; the government needs to come in and underwrite the industry at a profit.
“Even now we’re competing with the Burrinja Council who are taking touring artists and outbidding us there.
“Their insurance is minimal because it’s underwritten by the state government.
“Then they tell us they can’t do it, it’s too hard.”
Crombie predicts venue closures will accelerate from the current rate of one every two to three weeks around the country, with the crisis representing an existential threat to Melbourne’s live music ecosystem.
“We’re going to be the first of many,” he says.
“That’s where it’s at. You’re not going have any live music venues left under 500 capacity, they’re going under.
“The writing is on the wall.”
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