tax
Fix their end is move to Jersey to avoid paying tax.
The net effect is a cost to you. If the government weren't allowing this tax loop hole (which is also only economicly viable due to royal mail being required to deliver things for pennies from CI) then dvd warehouses would be in normal distribution centres like warrington, rochdale or burnley.
The costs fo running these warehouses are lower, so except for tax you would (could) pay less.
The profits from these warehouse operators and wages for all the staff would be subject to UK tax and the wages of the workers would go to local shops and businesses rather than ones in Jersey.
Don't forget also, the government aren't a business, if they need x pounds in tax they will just tax it elsewhere. So losing all this tax revenue just means you pay more some place else (it may even be secondary - maybe higher business rates cause your mocha frapuchino to cost 5p more tomorrow).
saving 40p off your next dvd really isn't worth it in the bigger picture.