Media release for Immediate Release 11 August 2009

Romney NZ Opposes Wool Levy

Romney NZ has today issued an open letter to all NZ wool growers stating its opposition to the proposed wool levy. The breeder’s association reaction was prompted after reviewing research in the United States showing that the recently launched strong-wool brand Just Shorn TM, has already eclipsed the long-standing Fern Mark in the consumer target market of luxury carpet buyers.

Chairman Hugh Taylor said “the results of the survey are staggering and show that Just Shorn is far and away the best brand at showing the benefits of wool to prospective buyers of luxury wool carpet and rugs.”

Taylor noted that the research also highlighted a major lack of recognition among US luxury carpet buyers for the Wools of New Zealand Fern Mark and the recently announced Wool Partners International brand Laneve, which are likely benefactors of the proposed levy.

“Of concern to us is that the Wools of New Zealand Fern Mark brand statistically has no consumer brand awareness. The Fern Mark (as a wool brand) has had up to $NZ250 million spent on it, yet only 3% of those surveyed indicated some vague recognition of the brand. “

“Meat & Wools’ current New Zealand wool programmes are totally ineffective and a complete failure. Meat & Wool is planning to spend $3m a year to assist its failed market development programmes to ‘transition’ to a commercial model. Those programmes have been operated by Wools of New Zealand, which has spent around $30m in the past 5 years – the same period during which the US dollar price for strong wool has fallen by half. “

“We cannot in all conscience recommend to wool growers that these failed programmes should continue. Far from allowing them to ‘transition’, perhaps we should stop them before they do any more damage.”

“Meat & Wool will argue that the levy should carry on to protect the capabilities developed in the past. We would argue that any capabilities that they have developed in wool have been ineffective and are therefore not worth retaining.”

The survey referred to was commissioned by Elders Primary Wool as part of its brand launch and promotion for the Just Shorn strategy. The company surveyed both the recognition and effectiveness Just Shorn, the Fern Mark and WPI’s new ‘Laneve’ brand across a range of measures.

The values that Elders wanted Just Shorn to communicate to luxury carpet buyers were “New Zealand wool - natural, sustainable and clean and green.”

A total of 93% of those surveyed felt that Just Shorn clearly communicated that the carpet was made of sheep wool and 91% were convinced that the brand communicated natural and organic themes.

The open letter to all wool growers in association with the Primary Wool Co-op and the Wairarapa Romney Improvement Groups says that while Just Shorn shows promise, neither of the current programmes of either Wool Partners International or Elders Primary Wool have yet proven that they are worthy of grower support. It also says that growers should focus on growing the best quality wool, but that those who choose not to should not be asked to fund market development through the levy for the benefit of others.

“We also note that the old Wool Industry Network identified that the single biggest problem with the wool industry is commodity thinking. A generic levy underpins such thinking. It’s time we broke from the past and allowed commercial operators the freedom to compete on a level playing field. Continuation of the levy will prevent that from happening.”

“We have no hesitation in recommending to growers that they vote ‘NO’ to the wool levy.”

ENDS