Wool industry urged not to revert to past

Media Release

_28 July 2008

Meat & Wool New Zealand urge wool industry not to revert to the past

Meat & Wool New Zealand is encouraged that “The Wool Company Ltd” (working name only) – an outcome of the Wool Industry Network (WIN) initiative to link supply and commercial interests – may be catalysing unity in the industry.

Meat & Wool New Zealand Chairman, Mike Petersen, in responding to a challenge by the Council of Wool Exporters to return to a generic marketing model, said it was good to see recognition that what’s good for the wool grower is good for everyone and the acknowledgement that the status quo was not an option for growers and the wider industry.

“WIN has spent a significant amount of time and effort investigating the best strategic priorities for the wool industry, and it has concluded that on its own generic promotion is not the marketing tool that is required. The long history of investment in the International Wool Secretariat and Fernmark has not delivered the returns that the industry needs, although part of the marketing story is clearly about the benefits of wool, which includes compatible wool from other countries.

Mr Petersen has been involved in numerous farmer and industry meetings in the last two months for both the meat and wool industries where the need for better prices has been discussed.

“Farmers are prepared to invest for the future, however Meat &Wool New Zealand does not have a mandate from farmers under the Commodity Levy Order to fund generic promotion for wool, as is being asked by the Council of Wool Exporters.

“The overwhelming view from farmers is for more targeted marketing and branding for both meat and wool products through commercial companies. Given the low meat prices in recent years there is renewed interest in obtaining significantly improved returns to farmers for strong wool from the market.”

Mr Petersen said it would not be in anyone’s interests to go back to the generic models of the past, and it was important to further explore the WIN model that seeks better linkages between the suppliers and manufacturers and retailers. Structural change was required for the marketing initiatives to be a success alongside consolidation of the clip and a more unified grower base.

“Market initiatives without structural change will struggle.”

Mr Petersen said the WIN initiative is an opportunity for industry collaboration and should not be seen as a threat by existing players. There has been considerable discussion with industry participants regarding the sector strategy, and contrary to the most recent claims from the Council of Wool Exporters, ongoing discussions are continuing.

“It’s not about progressing “The Wool Company Ltd” outside of existing structures and there is a strong desire to bring existing players together to rejuvenate the wool sector.”

Mr Petersen said he would be suggesting that there be further meetings between “The Wool Company Ltd” and the Council of Wool Exporters to talk more about the many issues they have in common and the future opportunities.

“We must make sure that we pursue initiatives that create meaningful change and in our haste to condemn any suggested change, that we do not simply revert to the old systems.”

ENDS

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