Wool Co-Op Has No Mandate

Note to editors

Questions reporters and woolgrowers should be asking Jeff Grant:

• Has Wool Partners Co-operative been in discussion with the Securities Commission about the first prospectus?

• Did the Securities Commission ask for certain additional information to be included in the new prospectus?

• What was this additional information?

19 January 2011

Wool Co-Op Has No Mandate or Status to Speak on Behalf of Growers

Fiddling around with 50 percent of the New Zealand wool clip and $300 million of exports was of interest to all New Zealanders and is “absolutely” the business of those involved in the industry, says Peter Crone, principal for the long established wool exporter John Marshall & Co.

Mr Crone said he took strong issue with the chairman of Wool Partners Co-operative, Jeff Grant, telling exporters they had no right to ask questions about the way wool is marketed and that the co-operative’s operations were no-one’s business but the growers.

“As a group of exporters deeply involved in this industry we have got every right to ask a few hard questions. With the float still $30 million short of a start-up, neither Wool Partners Co-operative nor Wool Partners International has a mandate to speak on behalf of all woolgrowers. They are very much a minority group, whichever way you look at it.

“The wool exporters’ council members buy 80 percent of the New Zealand clip. We are the customers of Wool Partners International and they acknowledge that they have to work with us if they are to survive,” Mr Crone said. “Which is even more reason why it is appropriate for us to comment.”

Mr Crone also defended the role of Wool Exporters’ Council executive manager Nick Nicholson.

“Mr Nicholson’s doing his job and judging by the reaction from Mr Grant he is being highly effective,” Mr Crone said. “We have a right to know the answers to questions about the industry and to make woolgrowers aware of issues.

“It is my personal view that the Wool Partners Co-operative model is idealistically naive. I look at Wool Partners International’s record of losing $5.8 million over the last two years (according to the PGG Wrightson accounts), and I just don’t see Wool Partners Co-operative turning that around.”

Mr Crone said that is partly because many of the same people are involved in managing Wool Partners Co-operative as those who currently manage Wool Partners International.

“Some of these guys have already had a fair crack at doing something about the wool industry through Meat and Wool NZ and other political organisations.

“The fact there is now no wool levy indicates the mood of farmers and is negative for the industry as a whole. They didn’t perform and now they want to throw the dice again and hope that they get a different result than the first time round.

“It’s time the directors faced the harsh realities,” Mr Crone advised the float’s promoters.

ENDS

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