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Guernsey's commerce and employment minister has said the island's fulfilment industry is "not over".

The UK treasury announced on Wednesday that it would abolish Low Value Consignment Relief from 1 April 2012.

This means VAT will have to be paid on all commercial packets or parcels sent to the UK by island-based companies.

The States has estimated that 650 jobs in Guernsey could be under threat but Deputy Carla McNulty-Bauer said: "I don't think it's over."

She pointed to the fact that the UK treasury would not formally publish its proposals until the pre-budget report on 6 December and said Guernsey would seek concessions.

"Bluntly, to me, fair competition does not mean just ring-fencing the Channel Islands," she said.

The decision, announced by Treasury Minister David Gauke, will apply only to the Channel Islands.

Deputy McNulty-Bauer said: "I think we do have to question whether it is fair competition, so I do think that is certainly one area I would want to pursue."

She said the impetus for the change had been a campaign concerning CD and DVD sales.

"Guernsey's fulfilment industry is much broader, much more diverse," she said.

The department estimates £260m worth of goods are sent to the UK by Guernsey-based companies each year.

These include digital media, flowers, cards and health supplements.