A REPORT into the future of Guernsey’s bulk-mailing industry is expected by the middle of next month. Commerce and Employment is working on proposals after considerable disquiet among UK retailers over the VAT exemption that allows companies in Guernsey to export goods under £18 tax-free into the country.
The plans include the possibility of capping exports of CDs and DVDs, potentially affecting HMV’s fulfilment centre.
‘Because it emerged that CDs and DVDs would also fall below that level, they’re exploiting the loophole and are therefore cheaper than their UK counterpart,’ said Commerce and Employment minister Stuart Falla.
‘These days, more people go on the internet to buy their CDs and DVDs - hence the fulfilment industry, having been around for five years or so.’
Deputy Falla pointed out that the island had a long history of sending boxes of flowers by post and had a healthy bulk-mail industry in general.
‘They’re UK rules, not our rules,’ he added.
‘The UK Government isn’t very happy but has had to go to the whole of Europe to get the loophole closed. It’s a hell of a lot of work. They’ve gone to Jersey and asked them to consider restricting the amount of DVDs and CDs that are dispatched. But Jersey has laws that allow them to do that.’
He said that the situation had prompted the department to instigate a review - which would impact only on DVDS and CDs - under the authority of the Office of Utility Regulation. By instigating the review, said Deputy Falla, Guernsey was acting as a good business neighbour.
‘We’ll either have to restrict the amount of growth in the business, or the alternative is that the UK bans that side of business altogether,’ he pointed out.
He said that the review would also look at the impact on couriers such as Guernsey Post, which would be affected as a result of restrictions on mail orders from HMV’s fulfilment centre.
HMV’s director of corporate communications Paul Barker said that the company was working closely with C&E in the hope of achieving a satisfactory outcome for all parties, adding that it was inappropriate for him to comment further at this stage.
OUR director general John Curran said that the report was expected to be ready a few weeks’ time.
He said regulator had met all interested parties, including bulk mailers and Guernsey Post, in an effort to understand the importance of the bulk-mailing industry to Guernsey and looking at the issues which had brought about the study.
Article posted on 27th October, 2007 - 12.00am
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