Draft Price Indicators (Jersey) Regulations 200-

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A decision made (25.01.08) to approve the draft Price Indicators (Jersey) Regulations 200-

Decision Reference: MD-E-2008-0018
Decision Summary Title :	Draft Price Indicators (Jersey) Regulations 200-		Date of Decision Summary:
Decision Summary Author:	Trevor Le Roux Director of Consumer Affairs & Trading Standards		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Oral		Person Giving Oral Report:	Trevor Le Roux – Director of Consumer Affairs & Trading Standards
Written Report Title :	N/A		Date of Written Report:	N/A
Written Report Author:	N/A		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	N/A
Subject: The Draft Price Indicators (Jersey) Regulations 200-
Decision(s): The Minister has approved the draft Price Indicators (Jersey) Regulations 200- and has decided to lodge them for States debate as soon as possible.
Reason(s) for Decision: The States must decide if regulation of retail price marking of goods should come into force at the same time as the Goods and Services Tax.
Resource Implications: There are no financial or manpower implications as a result of this decision.
Action required: Trevor Le Roux to ensure that the States Greffe lodge the draft Regulations by Tuesday 29th January 2008.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Draft Price Indicators (Jersey) Regulations 200-

Minister for Economic Development

Draft Price Indicators (Jersey) Regulations 200-

Report

Introduction

The draft Price Indicators (Jersey) Regulations 200- have been proposed as a result of the decision by the States on 7th November 2007 when the draft Price and Charge Indicators (Jersey) Law 2008 was passed by a large majority. The effect of that decision was to introduce general retail price marking legislation in Jersey for the first time. However, more significantly, the decision was taken that when the Goods and Services Tax (GST) is introduced, the prices of goods offered to consumers should, as a general rule, be displayed inclusive of GST so that what is advertised is what is paid at the till. This ensures that Jersey retailers follow fair trading practices which are prevalent throughout Europe and much of the rest of the world.

Background

The question of price displays subsequent to GST has indeed been well debated through various forms of local media and opinions varied, not just from consumers but also traders. In fact, prior to the publication of the Economic Affairs Scrutiny Panel report on the draft Price and Charge Indicators Law, there had been an intention to allow a period of unregulated price marking for retail goods. However, one of the major factors emerging from the Scrutiny investigation was that the main concern of retailers was not whether GST inclusive or exclusive was applied but that the States made a decision one way or the other as soon as possible.

Consequently, the Economic Development Minister in consultation with the Treasury Minister decided to re-lodge the draft Price and Charge Indicators (Jersey) Law to enable the States to fully debate the issue and make a decision. That decision was that GST should be included in retail price indications.

The Regulations

The Law passed in November 2007 was in essence an enabling Law and the significant provision is found in Article 2. This enables the States to make Regulations requiring the price of goods, or the charge for services, to be indicated when they are offered for sale. It is important to note that, in common with UK legislation, these draft Regulations apply only to goods offered to consumers and not services. This is because the vast majority of service providers – plumbers, electricians, builders and many other service providers by their very nature do not have set prices as nearly every job is unique. The price is made up of variable labour charges and materials used in completing the job. In effect, as in the UK, GST may be calculated and added as a separate item on a service invoice.

One very important provision in Article 2 of the Price and Charge Indicators Law is found in Article 2 (4). This enables the States to make exceptions to the general rule of GST inclusive price indicators and it has been found necessary to allow for some exceptions. Following the decision of the States in November 2007, a number of meetings were held with the Chamber of Commerce as well as other larger retailers to discuss the ramifications of not providing for some exceptions in the Regulations. It is well known that the vast majority of retail goods supplied in Jersey are imported from the UK and this includes pre-packed food. A relatively small percentage of this food is packed and priced for the UK market. It is accepted that it would be detrimental to the interests of local consumers to force some traders to either re-pack these food products, source products elsewhere at greater cost or possibly discontinue certain lines.

Therefore an exception for pre-priced food has been included in the draft Regulations. Other major problems for some retailers were pre-priced books, magazines and newspapers. These have also been provided for as exceptions to the GST inclusive rule. To ensure that consumers are made fully aware of these exceptions, it is a requirement that those retailers, who offer such goods, provide clear signs alerting customers to the fact that either a fixed amount or a percentage will be added to determine the final selling price.

It is of course possible that some retailers may decide to continue selling excepted goods at the pre-printed price which in effect would necessitate absorbing the GST. Therefore, there would be no need to provided appropriate signage. However, this would be a business decision to be made by individual retailers.

A detailed explanation of each Regulation is found in the explanatory note.

There are no financial or manpower implications for the States arising from the adoption of this Draft Law. (The additional work will be undertaken within Economic Development’s existing resources)