From Bob Jones
WHILE we have seen a great deal of Jersey Post’s response to the possibility of competition in the Island, there has been some suggestion from contributors to your newspaper that not a lot is known about the companies interested in competing in the Jersey postal market place.

As the person responsible for Citipost in the Channel Islands, I’m disappointed that this perception is held by some because, on the part of Citipost, there is no intention to seem mysterious, in fact quite the opposite.

Over the last year, we have engaged with the majority of Jersey’s e-commerce industry in an effort to learn more about their needs.

More recently we have held presentations which almost half of all States Members attended, as well as a large proportion of businesses engaged in the Island’s fulfilment industry. During these presentations we were able to dispel some of the myths that are being repeated about Citipost DSA and I would be grateful if you would let me correct some misperceptions.

Perhaps the largest misperception is that Citipost DSA will operate as a UK company in the Island. This is untrue.

Citipost DSA (Jersey) Limited is a locally registered company that is managed in Jersey and will employ local people. Perhaps most importantly, Citipost has opted to be classed as a utility and will therefore pay 20 per cent corporation tax rather than the zero per cent which the vast majority of Jersey companies pay under the new tax regime.

In the UK, Citipost is an established mail operator with over 20 years’ experience and most recently won an award as Fulfilment Distributor of the Year.

During the presentations which we held in the first week of May, internet and catalogue retailers based in Jersey were very concerned at the prospect of continuous high postal charge increases from a monopoly postal operator.

There were three principal concerns:
Firstly, without competition they said they would have to move some or all of their business to other jurisdictions such as Guernsey, Switzerland or the USA. Secondly, those who stayed in Jersey for reasons of established premises and staff would be severely constrained in terms of growth.

Finally, the Jersey Enterprise mantra ‘Jersey is open for business’ would not be the case for internet based retailers, since Jersey would not be attractive to new business and such businesses would be discouraged from coming to Jersey.

The fulfilment sector already employs over 1,000 people throughout the year, rising to over 2,000 at peak periods and is a significant contributor to local taxation.

The feedback that we’ve received from a number of firms has led us to believe that we can contribute a significant amount to the growth and development of the sector, particularly at this time when large and small fulfilment businesses are seeing their margins diminish because of rising postal prices from their existing monopoly supplier.

We believe that, contrary to their protestations, Jersey Post will maintain a large volume of their current business and have had ample time to prepare for competition since their transformation from a States department to an incorporated entity as far back as 2006.

If Jersey Post becomes more efficient due to competition, then their prices will fall and their customers will increase business volume.

This will mean higher profits for Jersey Post and fulfilment companies and ultimately greater tax receipts to the States of Jersey.

The introduction of competition in the postal market is essential if Jersey Post is to become more efficient and continue to be able to provide the full range of services.

It is simplistic to say that preventing competition maintains the status quo for Jersey Post. Additionally, without competition, fulfilment businesses are likely to leave the island and the ultimate cost to Jersey Post would be far greater than the cost of the introduction of competition.