Good Response To Strong Wools Marketing Proposal

29 June 2001

Representatives of strong wool growers say that so far they have had universal agreement from the wool industry that reform is needed.

The group is proposing to establish a grower-controlled procurement and supply entity that negotiates arrangements between industry players. It has been taking its proposal to the industry during the past week and will continue discussions next week.

"Our discussions have concentrated on the concept rather than the detail, but the response has been very encouraging so far," said Ed Kight, who is leading the grower group's industry discussions.

"One of our key principles is that a grower-owned organisation should act as a facilitator in the procurement of wool. It would bring together existing structures, resources and people, while allowing for entry to and exit from the industry."

Ed Kight says finding a way to do this in such a way as to bring together a critical mass of wool is the next step in the process.

"We are not under the illusion that anyone is making excess profits at growers' expense. The reality is that no-one is making enough money from wool.

"The existing system is a legacy of the days when the New Zealand clip was a lot larger, and when the market for wool was assured.

"There is excess capacity in the supply chain, which makes wool trading and processing in New Zealand inefficient. It is vital for everyone that we have an integrated organisation that co-ordinates procurement and assists exporters to meet market requirements."

The grower committee will meet again next week to review its discussions to date, and to promote further progress.

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