lure cruise ship passengers to their shops.

Merchants can pay middlemen to recommend their shops to passengers through on-board advertising "lectures''.

But the promotions which have spread alarm in the Caribbean island of St.

Thomas have been slammed by the Chamber of Commerce.

It has also called on immigration officials to probe claims scheme members have been illegally operating without work permits.

"The programme is cancerous. We must nip it in the bud,'' said Mr. Robert Rego, the Chamber's first vice president.

The Chamber has sent warning notices to its members, saying the scheme would only benefit the few who can afford advertising rates.

It claims rates are often ratchetted up as traders battle for limited advertising time.

The Miami-based firm behind the promotions, International Voyager Media, however, yesterday strongly defended itself.

Executive vice president, Mr. Peter Sugar, hit out: "The Chamber have a campaign to discredit us.'' He suggested Chamber chiefs were worried about competition to their new Cruise Ship guide.

"Everything we do is above board,'' he said, adding he had sought legal advice before operating in Bermuda.

Mr. Sugar said he understood he could discuss his programme with merchants without a permit -- although he had applied for one as a safeguard.

"If I have violated any law it is unknowingly. We are not here to jam our programme down people's throats. If it is not good for Bermuda, then fine.'' Mr. Sugar said his company had been invited here by Government to discuss ways of boosting spending by cruise ship passengers, and he had met with Premier the Hon. Sir John Swan.

He added his promotions had proved very successful elsewhere.

Today The Royal Gazette can name two firms in the programme: Crisson jewellers, and Bananas Gift Shops.

Other businesses which have been involved include The English Sports Shop, Harbour Front restaurant, Little Venice, St. George's Club, and The Club.

One firm, Archie Brown & Son, pulled out, complaining $500 per lecture was too high.

International Voyager Media (IVM) has contracts with Royal Caribbean Cruise Line and Norwegian Cruise Line to run programmes on the Nordic Prince and Westward respectively.

Under the scheme, "port lecturers'' advise people where to shop in Bermuda, and hand out photocopied maps of "guaranteed stores.'' In an urgent notice to traders, Mr. Rego, also chairman of the Chamber's cruise ship committee, said his organisation neither supported nor condoned the programmes.

"The programme is not designed to promote the total Bermuda vacation, but only to promote the services and products of those supporting the programme,'' the notice warned.

"International Voyager Media is not a local company, and will take its business and money elsewhere.

"Rates are often lowered to attract initial business and, as is the case in other island destinations, eventually escalate as retailers compete for limited advertising time.'' Mr. Rego also wrote to IVM accusing its employees of claiming to traders they had the backing of the Chamber -- something denied by Mr. Sugar.

"We do not consider this an ethical way of conducting business,'' Mr. Rego's letter said.

It went on: "It is our mandate to promote local industry, not to support the use of foreign labour and expertise as you were suggesting would be the case in the production of your promotional on-board materials.'' Mr. Rego said the Chamber aimed to create a level playing field for all businesses.

One man who witnessed a presentation on the Westward was Mr. Marc Morabito, general manager of Frith's Liquors Ltd, Hamilton.

In a letter to Mr. Richard Hartley, managing director of Burrows Lightbourn Ltd., he said the port lecturer did not make clear the presentation was a paid commercial.

"On the contrary, an impression of lack of bias and credibility is given by stating that his role is to ensure that passengers obtain the best value for their dollar in shopping ashore...''.

Other points in the lecture included a recommendation not to shop in St.

George's, he said.

He added special deals by "guaranteed stores'' were also talked up, and the lecture was repeated the next morning and on the ship's internal television channel.

"I feel that the tone of the lecture given to the passengers is derogatory when it comes to ethics and business practices of local merchants who do not participate in the `guaranteed stores' scheme.

"The inference is clearly that you could be victims of unscrupulous local merchants unless you shop in the `guaranteed stores'.'' Mr. Donald MacPherson, president of John S. Darrell, local agents for Royal Caribbean Cruise Ltd (RCCL), said yesterday: "I am aware of the situation and I did try to resolve it, but without success.'' Mr. MacPherson said IVM considered they were engaged in free enterprise.

He added the cruise line had been involved with IVM for years, and "wouldn't want to be associated with anything shady''.

Mr. Henry Hayward, president of Meyer Agencies, representing the Westward , said advertising schemes were an accepted type of operation.

"I am sure Norwegian Cruise Lines would not wish to be linked with any disreputable company,'' he said.

Strong support for IVM came yesterday from Mr. John Casling, president of Daina Ltd., which owns the Bananas Gift Shops.

He described IVM as a professional organisation which provided a "very, very valuable'' service to Bermuda.

"I think it's unfortunate every time someone comes forward with a new idea, businesses on this Island fire hose it.

"Here is a wonderful opportunity to promote all our stores and retail establishments.'' Mr. Casling said the promotions were like any other advertising which had to be paid for.

He stressed IVM had been completely honest in its dealings with his business, which is a member of the Chamber.

Any member wishing to pull out of the scheme only had to give two weeks notice, he added.

A man, describing himself as the manager, hung up when The Roayal Gazette contacted Crissons.

The Immigration Department yesterday said it was looking into the claims about work permit violations.