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Group: Administrators
Last Login: 17 July 2008
Posts: 19, Visits: 124 |
| As a director of a local small business, more specifically a family-run mail order business, I am shocked that after the last year of bad press due to the VAT de minimis situation, today's Guernsey Press reports that Commerce and Employment are furious that Virgin Megastores is to set up in Guernsey in order to exploit the island's VAT free status, but are powerless to stop it happening.
I am concerned at how this could affect my business and others like it on the island if Virgin raises the profile of the island's VAT advantage again. I am sure that earlier this year it was decided that Guernsey, and specifically Commerce and Employment, would do everything they could to prevent outside companies from being able to come in to the island for the sole purpose of taking advantage of the VAT advantage. But it seems that even they can not stop this from happening. They are therefore powerless in protecting Guernsey's local businesses from these outside pressures.
Another area for concern which in turn would affect a much wider spectrum of Guernsey's Small Businesses is the effect this has on the local employment pool. Unless of course they are using a 3rd party fulfillment company, in which case there is next to no benefit to this island at all.
Possibly the main concern is that Commerce & Employment, or more specifically Deputy Carla McNulty Bauer was unaware of Virgin moving into the island until now. Surely this must be incorrect. The States of Guernsey must have some involvement in a situation of this kind.
I would be interested in hearing other people's views, and any further information on this topic.
Whilst writing the above I have heard that Virgin have been set up here for about 2 weeks already, and that they are indeed using a 3rd party fulfillment company to do the business. Is this not the 'Brass Plate' scenario that Jersey was so uncomfortable with, and if so should Guernsey not beware of this too?
Garrick Jones
E. A. Carey (Europe) Ltd
www.eacarey.co.uk |
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Group: Administrators
Last Login: 17 July 2008
Posts: 19, Visits: 124 |
| I brought up the issue of Virgin Megastores move to the island at the Chamber Lunch Club yesterday, and there is also a story in today's Guernsey Press affirming Deputy Falla's response.
The long and short of it is that the States are unable to prevent companies from setting up here in Guernsey, but Commerce and Employment understand the issues which this particular case has brought up. After yesterday's lunch both Deputy Falla and McNulty-Bauer were due to have a meeting with the OUR at which the issue was to be discussed, with a view to understanding Guernsey's ability to limit these types of businesses coming to the island and threatening similar local businesses.
The Guernsey Press has reported that:
-the OUR will investigate the effect's on Guernsey's economy if the VAT exemption was modified or scrapped by the UK Government, and more details should be available over the next few days
-for the time being, to appease the UK Government there is a possibility that some sort of CD/DVD quota may be put in place and that the businesses on the island would be limited by this. A report should be forthcoming toward the end of the year which will then be discussed in more detail.
Does anyone else have a different take on what was reported or even stated at the lunch?
Garrick Jones
E. A. Carey (Europe) Ltd
www.eacarey.co.uk |
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Group: Forum Members
Last Login: 17 July 2008
Posts: 31, Visits: 36 |
| Garrick
You'll know as well as I do that this whole unfortunate saga started about 3 years ago when Jersey (Was it the Jersey Post) actively went out to UK brands asking them to fulfill out of their island. Tesco and Amazon I seem to remember. For a number of reasons - downturn in some sectors of the UK retail business and the rise of Internet shopping meant that the UK Retail Lobby Group got rather tetchy about this. In short, Jersey capitulated withdrew the business licences and hoped the problem would go away. It didn't. Once the spotlight had been shone on the Islands and now that Jersey had caved in the UK retail group smelled blood and continued pursuing their issues. That's the potted history.
Where we are now is that we have a high-profile brand, HMV, working its fulfillment out of the island. Guernsey doesn't issue business licences and, as an open jurisdiction, the thinking had always been the less regulation the better. Rightly so in my mind. But in the short 10 years of the existence of the Internet as a business tool no one envisaged the fulfillment industry to taking off like it has. One thing is low profile Fletchers Freesias or EA Carey as a homegrown business sending flowers or products in to the UK from its Guernsey base; it's completely different that UK high street brands turning up utilising the de-minimus rule to the potential detriment of our island's reputation. In my humble opinion, we simple don't need that kind of publicity.
So what's the way forward? C&E don't issue business licences so there's nothing to withdraw. Stuart Falla seems to be looking at alternative ways of limiting the amount of fulfillment out of the island. Quotas possibly? Well that's my take on it.
I suppose the other thing to consider is looking at HMV and Virgin what is the longevity of the CD and DVD business? Are we witnessing the tail end of a technology that's increasingly looking outmoded? Are they going to be here in 5 years time anyway?
I don't know what the answer is but there is a bit of me that has never been comfortable with us raising our head above the parapet either by accident or design. For those who will defend this practice by reminding me it is a legitimate business, I've heard the argument, but that's not the point. Brand Guernsey just doesn't need that kind of intrusion. Any effect it might have on existing fulfillment business or a shadow cast of our financial service sector we can well do without.
When I heard that Virgin (the world's most recognisable brand next to the Cross and Coca Cola and Microsoft) I sat at my desk put my head in my hands and thought "Oh God, not another one" |
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Group: Administrators
Last Login: 17 July 2008
Posts: 19, Visits: 124 |
| Just a quick update on this Neil. As you are probably well aware Virgin's operation in Guernsey is called Zavvi. Not sure why, but I have seen low price CD ads in the Guardian Guide supplement on and off by Zavvi (I think it was Zavvi anyway). It would be good to know who's running their operation over here, what/where the name Zavvi comes from and how it benefits the island's economy don't you think. So, if anybody reading has any information then post it here now.
Cheers, G
Garrick Jones
E. A. Carey (Europe) Ltd
www.eacarey.co.uk |
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