A Melbourne promotional company has apologised after being accused of organising a "racist" and "insensitive" nightclub event that profited from the coronavirus health emergency.

Key points: Mr Chan's and Pawn & Co have apologised on social media about the event

Mr Chan's and Pawn & Co have apologised on social media about the event Mr Chan's appeared to have recently shut down its Instagram account

Mr Chan's appeared to have recently shut down its Instagram account The president of the Chinese-Australia Friendship Association said the event fuelled "casual racism"

The company, Mr Chan's, was set to host an event at Pawn & Co in Prahran on Friday advertised as a "Corona Chinese New Year Special".

Patrons could buy a Corona beer for $8 and get a free face mask and buy "Happy Ending" cocktails.

Anthony Leong, president of the Chinese-Australia Friendship Association, called out the event as "ignorant, racist and insensitive" shortly before the event was cancelled.

"I was surprised that somebody, anybody, could be so insensitive and ignorant in terms of profiting from this and thinking it was funny," Mr Leong said.

"I think the timing is not just ill-conceived and insulting, it also shows a lack of knowledge, empathy and humanity."

Mr Chan's withdrew this promotional material for its coronavirus-themed night. ( Instagram: the.llag )

Pawn & Co pulled the event from its social media pages and apologised on Facebook on Wednesday night.

Mr Chan's posted a message on its Facebook page at the same time that said it recognised the promotion was "offensive" and apologised for the "inappropriate" material.

It said it was "taking action and reviewing the Mr Chan's branding immediately".

Mr Chan's appeared to have also shut down its Instagram account.

"We recognise that a promotional post that was made last week was offensive and we unreservedly apologise for this. We also recognise that some of our past promotional material was inappropriate, once again we apologise for this. We are taking action and reviewing the Mr Chan's branding immediately, it is important for us to run a night that is inclusive for all," the company wrote on social media.

'They need to be held to account'

Mr Leong said the apology was "too little, too late".

"It is making a mockery of a situation that is now global, not just Chinese," he said.

"They need to be held to account. To make light of something that has been fatal to hundreds of people is the height of inhumanity and insensitivity."

Sorry, this audio has expired Coronavirus-themed nightclub party cancelled after backlash

Mr Leong said the event desensitised people to "casual racism".

"They say, 'Oh it's only a joke'. But it's only a joke if you happen not to be the butt of it."

"If a white person is having a so-called joke at the expense of, in this case, the Chinese, that's very funny if you happen to be white and privileged. If you are not, you are the victim."

American blogger Ranier Maningding wrote a post about the event and said the "abundance of racism" on Mr Chan's social media pages was "a huge concern".

"Especially since the racism was used as a marketing gimmick to sell more overpriced drinks. If that's their level of bigotry out in the open, what are they like behind closed doors?" Mr Maningding said.

Pawn & Co apologised on Facebook for promoting the coronavirus-themed night and hosting Mr Chan's events. ( ABC News: Patrick Rocca )

'It is bullying, with very, very dark implications'

Mr Leong grew up in Melbourne and helped draft the 2001 Racial and Religious Tolerance Act.

He said education and not penalties was the key to changing racism in Australia.

"I believe these people should be told why this is wrong. I am part of the people they are making fun of and it is bullying, with very, very dark implications," he said.

Anthony Leong said the event profited from something that had caused hundreds of deaths. ( Supplied )

Mr Leong said he had witnessed a resurgence of racism in Australia over the last decade.

"It's becoming increasingly difficult to call out racism — people say you're being a bloody snowflake or you have a glass jaw," he said.

He also said education was "an uphill battle" when people were ignorant and unwilling to listen to how casual racism hurt those it was making fun of.

"I fear it will have to be a generational change," he said.

The Asian-themed event is the latest in a string of racially-fuelled attacks on Chinese Australians in the wake of the coronavirus.

Last week, Queensland Health dismissed a racist statement circulating on social media warning people against visiting Brisbane areas with high Chinese populations as a fake.

A surgeon on the Gold Coast has tweeted that one of her patients joked about not shaking her hand because of coronavirus.

Freelance writer Iris Zhao wrote about her own experience of racism in a supermarket where a woman was overheard saying Asians should "stay home" and "stop spreading the virus".

The ABC has approached Pawn & Co and Mr Chan's for comment.