Price challenge to traders

IT is time for those importing and selling tobacco, alcohol and petrol to come clean and explain why they are charging so much, the Treasury Minister has said.

Treasury Minister Senator Philip Ozouf in King Street
Treasury Minister Senator Philip Ozouf in King Street

IT is time for those importing and selling tobacco, alcohol and petrol to come clean and explain why they are charging so much, the Treasury Minister has said.

Armed with figures which showed the price of goods when Impôts duty and GST were removed, Senator Philip Ozouf called on them to end years of secrecy over unexplained margins.

And he said it was time they stopped hiding behind the myth that it was all down to the extra cost of doing business in Jersey.

Senator Ozouf explained that the net price of a packet of cigarettes in Jersey was £2.34, but £1.22 in the UK. He said that it was a similar story on forecourts and in pubs.

• See Saturday's JEP for full story

Comments for: "Price challenge to traders"

Kermit

Says the tax man who makes £3 out of every packet.

They just added 3% tax on those products and they are simply asking the retailer/supplier to cut their margins in order to improve theirs, (while pretending to be in the consumer interest).Canning plan...

Counting the pennies or self interest ?

TheMoaningOldBugger

How long has that #### been in office, and he has just learnt how to deduct the tax off a product to reveal the price us islanders are been forced to pay!!!!!!!!

God help us when he really understands how to read a set of account,,,,,

Trev

Quite simples,

pack of sigs,

33% is split between Manufacture/Wholesaler/Retailer,

66% in duty.

S

Isn,t there some form of minimum pricing in pubs. I think I, m right in saying the bond pub were told to put their prices up!

PJK

S, you are correct, it is currently £2.40 for a pint of John Smith bitter in the Bond pub, £3.00 to £3.20 elsewhere, the Bond were asked to increase their price!

Sheer greedis and always will be the ruination of Jersey.

Sensible

Its the police\licencing who insist that one pub cannot undercut another by nore than a certain percentage. I am sure a few pubs would want to trade from a price point but the silly law\understanding is to prevent drunkeness...have they been in town on a weekend!?!? Price has nothing to do with it!

Mogit

Nicely sidestepped there Phil !!!

mallouin

Always thought it strange that the profit margin increases in these areas seemed to occur around the growth of finance.But I step back a minute and think if the true price of say tobacco was reflected in the retail price would the Minister through the Health dept then increase the duty siting "health reasons".

James

I do hope that our Treasury Minister knows the answer to his own question. Forget the costs, retailers charge whatever prices we are prepared to pay. Why shouldn't they? If others can make money at lower prices, they'll come in provided competition is fair. The Government's role is to make sure that competition is fair, and then let the laws of supply and demand do their stuff.

S2

It's as simple as that; if people use one airport garage to fill up when the one next door is 10-14p cheaper, more fool them. One of my favourite lagers is over £4 a pint in my pub, so I'll drink something else

Home brew

One of my favoutite lagers is also very neat to £4 in the pub, answer, I go to an out of town retailer, stock always discounted, and buy it for under £I a bottle, I obviously drink at home.

Home brew

spell check favourite.

Anne

Kinda like the pot calling the kettle me thinks!

another_Chris

In the light of the local problems with excessive alcohol and tobacco use, should our Treasury Minister really be encouraging retailers to lower the prices, thereby potentially increasing the availability of these substances, or is he just looking for an opportunity to increase the duty?

Fuel prices ... there may be an argument for reduction there, but given the numbers of "oversize" private vehicles one sees on the road, I suspect that would have less overall impact than one might like!

Darius Pearce

Let me take you through the reasons one by one:

1) The cost of rentals in Jersey which is due primarily to the rent subsidy given to landlords by the States, which rose this year by 6% well above inflation, but then Ozouf owns a lot of property and wants his net worth to increase.

2) The cost of shipping which is due primarily to the failure of the States to build a deep water harbour to take the large ships.

3) The cost of staff which is due primarily to the overpayments made to States employees.

4) The low footfall of customers which is due primarily to the States of Jersey destroying the tourism industry and making it practically impossible to park anywhere in town.

5) The high cost of compliance which is due largely to the over-employment of people by the States of Jersey to do make work jobs which makes it expensive to run a business.

6) The introduction of GST which pushes up prices.

In short Mr Ozouf if you want to know who is responsible then LOOK IN THE MIRROR!

Government is the problem.

egalitarian

Got it in a nutshell!

Parktown Prawn

Totally agree Darius

I just have a few concerns though...

1) Isn't this a conflict of interest? shouldn't there be laws and protections in place to prevent this happening?

2) It amazes me to realise that these incompetents cannot see this. Not only that, but it could increase tourism with large cruise liners (like Guernsey) instead of concentrating on building on green land all the time. This could also help your point 4.

This also bugs me because there are so many derelict and uncared for poroperties around St Helier alone....why don't they improve these first instead of more new builds?

6...this was a no brainer. Why does Jersey feel we need this restrictive tax when Guernsey seems to cope perfectly fine without it. Is it to help with the golden handshales you mention in 3?

As far as I can see, there are not many people in this island who rates this clown.....so why is he still in a position of authority over our lives???

Sensible

I am against a regressive tax as much as the next man, but with Guernsey now in a hole with theit budget they are not the ideal we should strive to copy.

R. Williams

Ronez's operation on the north coast has prepared an ideal place for a deep water harbour in the future, though I'll probably be dead by then.

James

Quite a list yet missing the Number One reason why prices are what they are.

Because we are prepared to pay them.

Kermit

No, we aren't got no choice ...

Darius Pearce

Well James the trouble is that my internet prices are the lowest (go check Amazon or eBay) and the in store price in Jersey is even lower than that.

It is an urban myth that all Jersey shops have higher prices, jewellery is definitely still much, much cheaper in Jersey.

Ah for the days when Jersey was the UK's duty free shop.

Pierced

How often do you buy jewellery?

Darius Pearce

I can safely say that jewellery accounts for about 60% of my annual spending and watches another 25%

Scrutineer

The problem with the level of wages in the States Departments is due to too much emphasis being placed on the pseudo-science of job comparability. These consultants have methods of working out comparabilities, but comparisons are not easily transferred across from the private sector to the public sector. Job comparability is more valid between public sector jobs. It is much more effective to look at the recruitment and retention of staff. If you cannot recruit competent people you are not paying enough for those posts where you are trying to recruit. If staff are leaving voluntarily, you are not paying enough. If there is no voluntary outflow you are paying too much. So my question is: how many people are opting to leave States employment out of choice, and how does this compare with historic trends?

Simple Sid

Don't tell me he's only just noticed where's he been the last five years? What a ridicules story from a man who allegedly controls the finances.

Slasher

I thought pubs were not allowed to sell drink at reasonable or competitive prices for fear of the Bench not liking it. About time PO followed thru on his spin.

Perhaps someone from the trade can comment.

I would prefer to see people enjoying alcohol in an environment where behaviour and consumption is somewhat controlled by staff and fellow drinkers rather than people necking unmoderated amounts of booze at home.

Art

Yes Slasher, pubs were forced to raise prices (remember Quids In?) in order to keep their licenses.

Whilst we are about it, remember when someone wanted to build a new hospital extension in Kensington Place but they were blocked yet now just three years later we need a new hospital?

Remember that Le Mausuriers wanted to build a car park/shopping centre in the North of town and another plan to build car parking underneath the Town Park, but they were both blocked and now we have a dire shortage of town parking?

All these problems are as a direct responsibility of government decisions.

Rab

Now we have something that is definately newsworthy...many retailers must be cursing Mr Ozouf for bringing this subject to the fore. Islanders have been asking the same question for many years only to see NOTHING being done.

realist

If selling cigarettes is so profitable, why is there only one specialist shop left in town when there used to be several?

Usual rubbish from someone who obviously has never run a retail business.

jerseythepartiesover

We have all known that this rip off has been going on for years but Ozouf is only making an issue of it now because he is up for election soon (if he risks it). He could have put a stop to this profiteering but never did.

Too late now king of spin!!!!

James

What do you mean by "rip off"? If a private business decides to charge a certain price and we as consumers are prepared to pay that price, so be it. They run private businesses, not charities.

If you sold widgets which cost you a quid and priced them at a fiver and I wasn't prepared to pay a fiver, you'd probablly bring the price down until I was prepared to buy. Because you are a businessman. If you know that I would pay the fiver, why on earth would you charge me something lower?

Trinity

I don't see a problem in Jersey regarding alcohol or cigarettes?????????????? I'm in Ireland and a packet costs 9€ but who cares. We can live with it and life goes on even if they cost 20€, you'll always have people trying to smuggle cheap cigarettes in but I don't think a pack of cigarettes improves quality of life:-) If it costs more it will just be a luxury or treat like fine dining etc. Jersey should start tackling real problems, like affordable housing or better health care.

jim

what a little star you are ozouf you are the cause of the high prices in jersey with your gst and letting the jec get away with 9.5 percent price increase and putting up taxes on fags and booze dont bother standing for election just stand down now and go back to farming

egalitarian

I presume you blame Ozouf for the 9.99% increase in the price of electricity in the UK.

Judge Jeffries

Perhaps not but we can blame him for spending at least £300,000 on architect's fees for the new Route du Fort police station without first speaking to the Constable, the Roads Committee,Planning, neighbours, drivers, or anyone else who may have a sensible view.

howler

what 9.99% price increase i changed supplier and locked in my rate for two years but that's competition for you,,,,

Maw

Well Said,Trinity.

The states have all this money,yet they cannot provide homes for local people who work out of the finance sector,but who keep the wheels of this Island running.We must start looking after own work force!

When are we going to put Taxes on property developers,who build luxury apartments and houses out of grasp for local people.This would then intern help money filter back into more affordable housing for locals!!

Do we really need to be employing people from outside of the island? Who then, intern bring more family and relatives to burden the islands roads,hospitals,schools, etc! What ever happened to the time when government officials said, that they would bring in the relevant people for five years,on a permit to train the local staff for the required posts and then leave? Yet, they've all stayed here and are now clogging up our little island!

I guess this is to easy for any states member,like Ozouf to figure out.....Get a Grip and getting working for your public who voted for you!

Chris

Is this Guy for real!!

I guess he hasn't looked at what the government charges are? BECAUSE HE IS THE TREASURY MINISTER and HAS NEVER RUN HIS OWN BUSINESS!

Try this for starters Minister;

1. Harbour dues.

2. Taxes/ampot

3. GST.

4. Freight and shipping

5. Local transport costs

6. Rents

7. Social Security

8. Insurance

9. Fuel

10. Maintenance

No go back and do your home work before making press releases like this!

Realist

A cutback on states profligacy would probably go a long way to balancing the books.

Mister shifter

I think ouzaf should contemplate this well known quote. What can I do for the Island, not what can the Island do for me.

If previous actions are anything to go by, then sweet FA!

This has to be the most ridiculous statement he has made thus far and further compounds how out of touch he is with society as a whole.

I wish I had been born with a silver spoon in my mouth and have the audacity to walk the street and look people in the eye who are suffering the fallout from my policies.

It's been said before, but the sooner this man goes the better.

Beaumont

I have a question, does anybody here know of a single person who supports Ozouf?

I don't know anybody at all!

In fact, just the very mention of Philip Ozouf usually inspires responses that would be unrepeatable on this website

Mario

No I don't but still some clowns must be voting for him. Let us hope he is out of office come 2015 or we will be in even more trouble.

James

Yes, I do. Me. The level of economic debate on here hardly provides reason for changing my mind. There are some quips and insults and the usual forlorn hope that he'll get voted out next time, which all sounds good but no real challenge to the economic direction that he is taking us. No, I don't agree with everything he says or does, but the general direction is the right one. The reason why the States have been able to vote in the expenditure they have for the three year plan (which in itself is a welcome innovation) is that we approached the challenge of filling the 0/10 hole on four fronts - reduction in States expenditure, diversifying the tax base by introducing an indirect tax (ie GST), make higher earners pay more Income Tax (20 means 20) and economic growth (which realistically means investment in our largest industry, because it is largest by a mile).

I liked the balance of the plan, I think we could have been bolder in at least one of them, and I think that we are starting to see the benefits of it.

Let's have the childish insults then....

overpopulated

In the UK they are grasping the welfare nettle and getting flack, this needs to be addressed here, starting with a reduction of the rent rebate element which has inflated rents and house prices

mallouin

By removing the 'rent rebate element'you would instantly place thousands of local,qualified people generally within the lower income range in jeopardy.I would forsee many,many applying to the States for housing which is unavailable,families being evicted and the welfare bill soaring in other areas.Before you spout that 'landlords will have to lower their rents",I have a wonderful landlord who would find it extremely difficult to do such and I do understand that not all are as good but many are.The cost of 'rent rebate' is a concern but needs to be looked at in real depth and effects many elements of society.Beware unintended consequences!I for one would be homeless or in a room.

Mario

A better way would have been not to have been sucked in to the "finance" mind set and maintained a diversified economy. With a constricting finance sector where is all this growth going to come from? So much for putting all your eggs in one basket.

If you knew what a balanced plan was you would realise that we are in a mess.

At least you have had the guts to admit to voting for the big o. BTW I wouldn't bet on him getting back in. His U turn on GST has upset a lot of people and some no doubt would have voted him in to office on his robust oppostion to increasing GST. These voters will obviously not be taken in a second time.

James

I daresay you made similar predictions about Ozouf before the last time he was elected.

Somewhat patronising your comment regarding guts. There is no risk here, this is a virtual site and besides, there are more in the Ozouf gang than in yours!

I absolutely understand the need for diversification in the economy. I don't agree that eggs have been deliberately placed into one basket - one of the ducklings happened to turn into a glorious swan. The problem is that there is no second industry that has a chance of an era as golden as that of the finance industry, which will indeed become silver and then bronze. We need to manage that contraction, build other industries as best we can, but adjust all our expectations as to what can realistically be achieved. This is why the introduction of GST was so important, to add a consumer tax to the basket in addition to the direct taxes. It was a necessary thing to do in terms of fiscal policy and if you want to talk about guts, you can't deny that Ozouf has pressed ahead despite opposition from those whose view of the long-term extends only to Christmas.

jim

while we are on the subject of why it costs more in jersey check out the prices for the jersey tgi fridays compared to the uk restaurants. there is a big difference.they are charging more in jersey. no surprise there then.

Pinokio

I think this man does a good job...... I would vote him in for another 4 years...............

Off to chop my nose......

COM-Mentator

Electioneering from the King o' Spin. This factoid has been known since Walker was Finance Minister. Why speak out now?

GREED is the simple answer. From the retailers to the tax man themselves!

Observer

What a cynical attempt to pretend that he cares about the man in the street!!

This man invented the JCRA to introduce competition - has he forgotten this or is it an ackowledgement that his creation is another failure.

This man is spin spin spin and no result and it is high time he did something useful like resign.

Mark B

For the record there is an extra cost involved in running a business in Jersey.

Having done it previously for 5 years, the rents on some of the buildings in town are sky high - and nothing has been done to cap these, so it is little wonder retaiers have to cover these costs......it is a fact of life and not the BS some would have you beleive. Trust me I wasn't living the high life and driving a porsche when I ran my business.

I am sure any other business owners on here who lease their premises will confirm that their rents are very sizeable and thats not something that can just be ignored when calculating the price of the goods they sell.

Judge Jeffries

Retail rents haven't risen in the past three to five years ( unless you have been foolish enough to sign a lease containing JRPI linked rent reviews ) and in fact some have fallen. So you can ditch that hoary old chestnut. Also be relieved that you don't have to fork out for UK style business rates which work out at 40% of rent on top; although this is a new area of taxation that our dear treasury minister is thinking about. Watch the local economy crumble if he goes down that particular route !

Darius Pearce

We are a town of 100,000 people so compare rents on our high street to say Sutton Coldfield - ours are a lot, lot higher.

Now how much more passing trade does Sutton Coldfield get than Jersey and I think you can see the problem - Jersey is not somewhere that people pass through.

If it costs £150,000 to operate your business and you get one customer per year then you need to make £165,000 profit of that customer to have a 10% profit margin.

If you get 165,000 customers per year you need to make £1 per customer to have a 10% profit margin.

When we had 1 million visitors per year then we all did well, now we have maybe 200,000 per year well then the margin must increase to maintain the required level of profit.

Profit is required to re-invest in businesses to drive the very economic growth which is needed.

Simple economics.

The States however are happy to have fake economic growth - which is more civil service jobs and more government spending... this sort of growth damages the economy and impoverishes everyone because taxes must rise.

Beaumont

I agree with much of what you say, Darius. However, whilst you say Sutton Coldfield would have more passing trade than Jersey, the people of Sutton Coldfield are more likely to travel 10-20 miles to do business, Birmingham for example. Also, Sutton Coldfield has a small tourism industry compared to us, so we probably do get more passing trade than them.

For me, the States and UK Councils don't do enough to support business. The taxes and costs of running a business on the high street, has made retail unviable. They just don't seem to recognise how the internet has squeezed traditional shops to bankruptcy. The States and Local Authorities are the only ones who can help them survive, but appear to want to do the opposite

COM-Mentator

Darius, all that is true but the problem is during the boom years everyone had it cushy. So to continue making money footfall has decreased so prices have gone up way way above inflation. Pricing themselves out of the market - which Unites union members are trying to do.

Answer is people no longer buy local, so footfall decreases further, so prices go up higher.

IF the states let in a primark or similar then the shop will be heaving because the prices are comparable to the internet. TWO shops that have done well and are always busy are George and NewLook. The fashionistas, and expensive sandwich shops are dieing a slow death as people stop spending on luxury high end and in some cases dubious quality. Service is a factor too when you consider the appalling language skills of some shop attendants.

So as a retailer you have a choice. Reduce your prices and survive by increasing footfall or continue down the spiral of oblivion. People are no longer a captive audience to be squeezed at will by either retailers or the tax man they will and do vote with their feet.

Realist

You've never run a business in Jersey, or you wouldn't write such rubbish.

S G

I read in the J E P that he had worked in the liquid fuel industry before he was elected into the states.

Was he a petrol pump assistant,because that is all he is capable of .

Katie

No a Petrol Pump Attendant needs more brains, or at least an understanding of money and figures and the right amount to put in without overcharging the retailer and customer from the outset!

S G

Katie

That is why i stated assistant and not attendant.

big bad barry

I'm afraid nobody really knows much about what PO did before he joined the States. Whatever it was he'd stopped doing it by the age of 26/27 at the latest, when he was back in the island, kicking around with nothing to do.

I know he supposedly went to university, then to McKinsey, now he apparantly was in the fuel industry. But I'm not sure many believe it - I certainly know of one Senator who has openly questioned his qualifications in a public meeting.

Mario

Maybe that could be a question to put to him at the next hustings.

Vote'em out

Mario, you should know by now that the cards and stacked and the game is rigged.

You cannot ask such reasonable questions at the hustings. The questions have to phrased so that everyone has a chance to answer them.

If we were able to ask individual questions to individual candidates I would guess that the outcome of the elections would be very different.

expat roger

make the island duty free(simples)

johnny fp

Cynics would ask why is he posing this question after all this time. But if he can get some proper analysis done to reveal the combination of greed and poor supplier management, nice one.

The healthiest competition occurs when average people win by putting above average effort.

Brian Jacks

Like the little boy who cried wolf so many times that nobody ended up believing him.