GST charges are restricting growth of small businesses, says Jersey gin producer

Sarah Gaudion, Jersey's first female distiller, at Sea Level Eco Distillery Picture: DAVID FERGUSON. (36465149)

A GIN distiller has said GST ‘penalises’ local producers who are trying to export their products.

Sarah Gaudion runs Sea Level Eco Distillery from her home in Gorey, making three types of gin and a limoncello.

One potential area of development identified in the government’s recently launched Export Strategy is the Island’s spirits industry.

It says: ‘There are a small number of distillers producing spirits in Jersey, with more producing off-Island while maintaining links to Jersey.

‘These micro-distilleries operate on a small scale but link to Jersey’s celebrated produce and premium reputation, with some qualifying to use the Genuine Jersey mark.’

Ms Gaudion said the strategy was a ‘step in the right direction’ but there was ‘a lot of work to do’.

She added: ‘The current rules around GST, for instance, penalise the local producer trying to expand beyond Jersey.

‘I import ethanol because we don’t have the fields of wheat that are needed to make it. I pay duty on the ethanol and then GST on the ethanol and duty combined. I also pay GST on the freight.

‘When I export my gin, I can claim back the alcohol duty, but not the GST. It makes the whole process prohibitively expensive and is why some Jersey producers do most of their manufacturing in the UK.

‘I have exported some bottles to the Royal Navy, who give them as gifts to ambassadors and other dignitaries when visiting foreign countries, but it is a very difficult and expensive thing to do. How can I compete against distillers in Guernsey or the UK who don’t have their profits wiped out by tax?’

Ms Gaudion added that having to pay ‘front-end duty’ – which is due when her ethanol arrives in Jersey – made it very difficult to develop new products, such as an aged gin, because she could not afford to have ethanol with pre-paid duty sitting around for up to a year.

‘The Island also needs to seek to expand ‘‘Protected Designation of Origin’’ status beyond the Jersey Royal to give local producers better recognition internationally,’ she said. ‘I am not eligible to be a Genuine Jersey member because of the imported ethanol and, in any case, that mark is not widely recognised beyond the Island.’

Ms Gaudion said that it was possible to produce a small amount of ethanol locally – under 2,000 litres annually, which also attracted a lower rate of duty – but she intended to make up to 10,000 700ml bottles this year. This threshold should be reviewed, she suggested.

‘When implementing the strategy, the government needs to acknowledge that there are lots of Islanders who are trying to grow their enterprises, but not everyone is working in agriculture or dairy. It is great news that we have a vision, but – as always – the devil is in the detail.’

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