Government open to renegotiating freight rate

Lyndon Farnham said the terms of the contract with DFDS could be negotiated at any time

The government is open to renegotiating the pricing structure for freight if it makes goods more expensive for islanders, Jersey's chief minister has said.

Deputy Lyndon Farnham was confident the flat rate structure - which means every freight provider pays the same per metre of space they take up on a ship for goods they bring in - was beneficial to islanders in the long term.

He told the States the government would consider renegotiating with DFDS on freight pricing if it was not beneficial but they would "stick to our guns for now".

Supermarket bosses recently told politicians the flat rate of freight model was leading to an increase in grocery prices.

Farnham was responding to questions on how the government was helping islanders with the cost of living.

Deputy Montford Tadier asked the chief minister if he would be "dogmatic" on the flat rate of freight given there was a suggestion the flat rate was "contributing excessively to the cost of living in Jersey".

He asked if he would be "open to suggesting that DFDS don't have to charge a flat rate for freight to allow for more dynamic pricing and more flexibility in the charging of freight".

The chief minister said: "I honestly think a flat rate will work in the best interests going forward, it will provide some small inflation in the short term, but that will even out."

Farnham said the terms of the contract could be negotiated at any time.

"So if we were to see an ongoing problem or continued challenges, if we fail to see more competition in the freight forwarding market, then that might be a time to renegotiate that to try and drive costs down but at this time we need to stick to our guns and support more competition in the market," he said.

'Completely unnecessary'

Tadier challenged Minister for Economic Development Deputy Kirsten Morel on the issue.

He read out a statement from the chief executive of food and beverage operator Sandpiper made to the economic and international affairs scrutiny panel.

Sandpiper described the additional costs on bringing food to Jersey as "completely unnecessary".

The chief minister replied: "It is not my job to protect the profits of the supermarkets, we know that supermarkets in Jersey are very profitable, we do not get the benefit of seeing their books or seeing the profit they make.

"We now have competition in the freight forwarding market, the dominant player in that market I have no doubt is very upset that their domination is open to competition now but that is the appropriate place for competition."