High prices 'not due to lack of competition'

A basket of shopping can be 33% more expensive in Jersey than in some of the UK's cheapest supermarkets

The high cost of groceries in Jersey is not because of a lack of competition, according to a new report.

The Jersey Competition Regulatory Authority (JCRA) said it found a basket of shopping could be 33% more expensive on the island than in some of the UK's cheapest supermarkets.

But it said that was because of additional expenses such as freight and labour costs, and it did not believe local supermarkets were making excessive profits.

The JCRA said consumers were being well served but that the competitive process needed to be bolstered, with it recommending changes, including greater price transparency.

The JCRA said on-island costs meant shopping was more expensive than in the UK

As well as higher on-island operating costs, such as freight and labour, the JCRA said price disparities between Jersey and the UK "primarily stemmed from tax discrepancies, rather than a lack of competition".

Although Jersey had witnessed food price inflation, it was consistent with inflation rates elsewhere, according to the JCRA.

The authority said it was making three recommendations, including :

• Improving price transparency to encourage greater price-based competition

• Maintaining a competitive and dynamic groceries market, by minimising entry barriers, such as planning, and promoting Jersey as a testbed for innovation

• Following up previous JCRA recommendations to increase competition and reduce freight costs

JCRA chief economist Peter Hetherington said: "Competition in the Jersey grocery market is working.

"Grocery suppliers are not making excessive profits, and comprehensive survey data indicates that Jersey customers are well served by the market.

"Nonetheless, our report does set out recommendations for policy makers to further support the competitive process and consumers."