FIRST ON 7: Despite the deaths of Australians from contaminated drinks, Bali's police chief is refusing to shut down bars and jail their owners.

Seven News can reveal that instead of improving safety for tourists, local authorities are blaming them.

In 2011, Michael Denton travelled to Bali for a rugby tournament, and was drinking with teammates at the Bounty Hotel when he started to feel sick.

"He said he was going to go back to lie down, said he was feeling drunk - but happy, nothing out of the ordinary,” friend and team medic Trent Gainey said.

"[It was] supposed to be a good time, the whole time we're just waiting. Waiting for him to wake up."

Michael was in peak physical condition, but the following morning his teammates found him unconscious and seriously ill.

He didn't survive, with a post-mortem revealing that he died of methanol poisoning.

The 29-year-old joined the growing list of tourists blinded or killed in Bali and nearby Lombok, by liquor contaminated with methanol.

But Balinese police have a simple solution to the problem - they simply deny it exists.

"The cases that exist in Bali were caused by the consumers themselves. They mixed the drink and they drank it," Deputy Police Chief Ketut Untung Yoga Ana said.

Kuta used to be all about surfing, now it's a multimillion dollar party town revolving around pubs and clubs.

But many Australians in Bali don't seem too concerned about what's in their glass, with some tourists admitting to Seven News that they drink Arak, or methanol.

Last month, in the nearby Gilli Islands, Australian teenager Liam Davies drank a fatal dose of methanol-laced vodka.

Seven News returned to find that the bar where Liam bought the beverage was still open, and openly selling drinks containing hallucinogenic magic mushrooms.

Lombok Police say they can't act until their testing is complete, but samples taken by Seven News show they are still selling drinks that record significant methanol readings.

Bali Hospital staff say they've seen the results of methanol poisoning, but often there's little they can do.

Doctor Reno Riandito said you get what you pay for in Bali and urges tourists to avoid bars selling the cheapest mixed drinks.

"Buy in a proper place, don't buy on the streets and go to a bar that have a proper licence," Dr Riandito said.

Michael Denton's friend and medic, Trent Gainey, says a lot of tourists believe the risks in Bali are minimal, but he warns of the fatal dangers.

"I think that people are a little bit complacent about going to Bali thinking that because everyone else goes there, might have been there a few times," Mr Gainey said.