ELEVEN jobs will go as Guernsey Colour Laboratories halves its workforce. Management blames the decline in the film processing market and a poor and expensive postal service.

Managing director John Houslip said the situation was not unusual in the industry.

‘The film processing market has declined by 75% in the past three years and several major manufacturers and processors have either closed or restructured,’ he said.

The company will retain the Internet side of its business but the film-processing will be subcontracted to a UK firm.

The local film processing service, which is done through more than 20 outlets, will cease today and the mail-order service at the end of next week.

‘Film processing on an industrial scale is volume- driven to meet the necessary costs in order to compete,’ said Mr Houslip.

‘Once the volume declines below the critical point and you can no longer remain competitive, the situation worsens.

‘It’s not viable to continue processing films in Guernsey because of increased costs, particularly the proposed postal increases and the service offered by Guernsey Post,’ he said.

He said that while statistics showed that many items arrived within the stated service time, this was offset by a considerable percentage that took up to two weeks to get here. This was a sporadic problem that had existed since the late 1990s and while Guernsey Post had taken steps to improve things, it had never resolved the issues.

Previously, said Mr Houslip, Guernsey Post had one account handler who dealt with all aspects of GCL’s business but now different people handled different aspects of it.

As a result, his company was forced to do more on the postal side itself and pay more for it. He believed that bulk mail users were heavily subsidising the remainder of Guernsey Post’s operations.

GCL staff were told the news at the beginning of last week and a consultation period followed. The final decision was made on Monday.

Mr Houslip said all redundancies would be dealt with in line with local employment legislation. Some staff had been with the company for more than 15 years.

‘I’d like to take this opportunity to thank all our customers who have used our service over the years and all our staff for their loyal service.’

Guernsey Post operations director Joe Domican said the utility offered the choice of two levels of service to its bulk mail users, based on whether the mail was sorted or unsorted.

Guernsey Post had no direct influence over these services once they had left the Bailiwick but it did work closely with Royal Mail to maintain delivery standards in the UK.

It was consistently achieving the 80% target on posting-day-plus-three-days for unsorted mail which was a lower specified product than the sorted mail service which was achieving a much higher success rate of 89.3% on the same delivery time, although the target was 91%.

‘Cross-subsidisation of pricing has been evident in postal operations for very many years and it is the drive to introduce competition that is forcing the eradication of it in the UK market,’ said Mr Domican.

This underpinned the introduction of Pricing in Proportion in the UK that has had a huge impact on the cost of the service typically used by film processors.

The introduction of PiP means that low-weight awkwardly shaped packets, typically film packets, are starting to bear their true cost after years of being subsidised by other mail users.

Guernsey Post tariff proposals have sought to implement a phased rebalancing of tariffs to achieve a far greater level of cost-reflective pricing than was evident in previous years using these same principles.

‘Guernsey Post continues to strive to ensure that it provides the best possible levels of service at competitive prices and our customers continue to enjoy consistently high quality postal services at some of the cheapest prices in Europe.’