Retail boss blasts government for freight charges and fuelling food inflation

Tony O’Neill, Executive Chairman of SandpiperCI says Jersey's government either was misinformed about, or miscalculated, the effect the ferry tender would have on freight costs.

The boss of the retail group, which operates the island's M&S stores as well as Matalan and IQ Apple, says shipping costs for his company have risen by 5.8%.

He says the consequential food prices increased for consumers are therefore well above the 0.4% Jersey's government predicted when it gave the DFDS the contract to operated ferry services.

In a blistering open letter, Mr O'Neill says there is 'absolutely no doubt' that DFDS’s freight charging is pushing up shop prices.

"Despite repeated requests, we have seen no evidence to support the government’s position that retail costs would ‘only increase by 0.4%’ with the new contract.

"I can categorically state that freight costs have increased by just over 5.8% for our company with consequent price increases far in excess of 0.4% for consumers."

He says port dues, which DFDS has applied respectively, will add £400,000 to his firm's freight bill, which 'will have to be recovered'.

"We still do not know if the government’s claim of a ‘0.4% increase in food prices’ included these Port Dues.

"If they did, then they were aware all along, and if they do not, this points to a very expensive £2-£3m per year error which, on a 20-year contract, equates to a £60m plus error."

Mr O'Neill says it was 'clear' that a single operating serving both Jersey and Guernsey would have been able to 'spread costs and gain synergies', and he takes aim at Economic Development Minister Kirsten Morel's decision to appoint DFDS and insist on a 'flat rate' freight charging structure.

"Of course, the Economic Minister  as usual did not consult with retailers before taking this course of action and continues to demonstrate a complete lack of business understanding or experience

"It’s very clear that the original procurement process for a new operator was either incomplete or based on misleading assumptions.

"There is now a serious question of credibility in those who negotiated this contract and it’s clear that there is now a strong case for reopening the tender to ensure fairness, value, and complete transparency for Jersey."

 Freight ship, the MV Arrow

DFDS firmly rejects claims that its freight pricing structure is driving significant cost increases.

It says there are other factors at play:

"Independent analysis for the Government of Jersey has shown that the effect of DFDS’s new structure on grocery prices is minimal when compared with the broader logistics, distribution, labour (including this year’s significant minimum wage increases) and energy costs that make up the majority of retail expenses.

"To present DFDS as the source of wider inflationary pressures is therefore misleading."

Mr O'Neill has also blasted ministers for raising the minimum wage to £14.10 an hour from April 2026, saying it will further drive up costs for consumers.

"Unlike the UK, Jersey law does not allow age-banded pay. This means all workers must be paid the full rate, regardless of age or experience. In practice, the rise would not only affect entry-level staff but would also push up wages across all levels, as businesses seek to maintain pay differentials.

"For us as a major retailer, the change alone would add over £500,000 a year to incremental payroll costs in Jersey."