Guernsey post-rate hike ‘could drive businesses away’
BULK mailers could leave Guernsey because of increased postal tariffs.
Bulk Mailers’ Association chairman Rodney Brouard said that new Guernsey Post charges, sanctioned by the Office of Utility Regulation last week, could see island-based mail-order companies relocate to other more-affordable locations.
‘It is a very competitive market. The 17.5% VAT ‘loophole’ does not just apply to the Channel Islands, it applies anywhere outside Europe.’
The USA, China and Hong Kong are among the competitors.
Mr Brouard said that if bulk mailers pulled out of Guernsey, it would have a negative impact on the island economy.
He said the industry was the biggest contributor to Guernsey Post and that it also supported freight companies and was a source of employment. He could not say whether jobs in the sector would be lost following the increased charges.
‘I certainly hope not,’ he said.
Guernsey Post, reacting to increased Royal Mail costs, is set to increase its bulk-mail tariff by up to 70% from August.
Mr Brouard said Guernsey Post was not distributing its increases evenly. He said members were happy to cover costs plus a sensible profit for the postal service, but those members would be cross-subsidising domestic-post charges and that Guernsey Post should have increased the price of domestic mail in conjunction with any rise levied on his industry.
‘The letter levels are too low – it’s one of the lowest in Europe. But they ‘Guernsey Post’ don’t want to upset the public.
‘It is easier to upset 12 bulk mailers than 60,000 members of the public.’
He said a Guernsey-based price rise would have knock-on effects on the industry and its customers.
‘There is no doubt about it, all those charges have to be carried to the customer at the other end.’
Mr Brouard said the majority of BMA members sorted their own orders and sent them away without direct help from Guernsey Post.
‘It does not all physically go through Guernsey Post, but they will pay Royal Mail for delivering it.’
He said BMA members were pleased that further proposals would be unveiled later this year which would see the continued rebalancing of tariffs.
