Wool report fails to impress sceptical industry

Wool exporters say the McKinsey report, which proposes a restructuring of the sheep industry and the way wool is marketed, is predictable and has serious flaws.

And Federated Farmers meat and fibre chairman Chris Lester says Wool Board directors are already casting doubts on whether wool growers should vote on the review recommendations as a whole.

This has been denied by board chairman Bruce Munro, but Mr Lester is convinced that was the message he and others got from directors at a briefing on the report in Wellington, and at another meeting in Taumarunui.

The review team's report, containing 10 recommendations for revitalising the wool industry, was released a fortnight ago with the proviso that it be accepted as a package, or not at all.

Wool Corporation chairman Phil Verry said the report had significant weaknesses and failed to address a number of fundamental issues.

He had floated an alternative proposal to replace the auction system with a modern wool-marketing system, but the Wool Board had blocked the idea.

Mr Verry said the report did not address price volatility, a big concern for manufacturers using wool but not a problem for those using synthetic fibres.

Nor did it address the problem of year-round supply, which manufacturers relied on. Wool growers were missing out on sales and better prices because of these problems.

However, Mr Verry viewed the report as a catalyst for change, regardless of whether it was adopted by farmers.

"Anything that gets rid of the Wool Board is long overdue. At least growers will finally get the message that Wools of New Zealand marketing does not add value to their wool."

Wool Exporters Council president Peter Crone said exporters were disappointed but not surprised that the McKinsey study had not proposed new ideas or radical change.

"Pre-determined outcomes developed by the Wool Board have prevailed," he said.

The recommendations were a virtual mirror image of the Wool Board's failed Fernlink proposal.

Mr Crone said exporters were concerned that if the McKinsey recommendations were accepted by farmers, wool promotion, especially the Fernmark strategy, would suffer.

Growers could expect a backlash from customers who had contributed significant amounts of money to the Fernmark quality label.

"It is naive to expect that these customers will suddenly switch to buying through Strongwool NZ [a new commercial company to evolve from Wools of New Zealand] just to retain the Fernmark."

Mr Crone said the report had ignored worldwide support for Fernmark shown at the International Wool Textile Organisation conference in Christchurch in May.

- NZPA