Strong wool players get gloves off

The debate over a new industry structure for strong wool has turned nasty, with allegations opponents of change were spreading misinformation to undermine discussion and protecting their turf.

Wool Partners International, which is behind the fledgling grower-owned marketing and exporting wool co-operative Wool Partners Co-operative (WPC), has vowed to respond, saying critics of the venture were confusing potential investors.

Nick Nicholson, executive manager of the New Zealand Council of Wool Exporters and a critic of WPC, said his organisation's role was to assist growers by posing questions they should be asking.

WPC is the result of several reviews investigating the wool industry's 20 years of lacklustre performance, which it is seeking to reverse by getting growers to commit to supplying it with 50% of the country's strong wool clip and subscribing over five years to $65 million in shares, equal to $1 for every kg of wool supplied.

It proposes using brands and an integrated supply chain to increase returns, similar to what New Zealand Merino has done with fine wool.

If it does not meet its subscription target, WPC will not proceed. Last Friday, it extended its share subscription target from yesterday to December 17, but claims it was receiving 300 applications a day.

Wool Partners International chief executive Iain Abercrombie said such claims as his company was taking credit for the recent increase in the price of wool and that 90c out of every $1 invested in WPC was going to repay a $10 million loan from PGG Wrightson were "nonsense".

The loan was made to WPI partner Wool Grower Holdings (WGH), which used it to establish WPI, and the debt was the responsibility of the WGH board.

Mr Abercrombie said it appeared some in the wool industry were protecting their own interests.

"There are groups not wanting growers to form a Fonterra-type co-operative and take ownership of their industry, and that is a shame."

WPC has avoided getting drawn into a public slanging match, but Mr Abercrombie said a board meeting on Monday night concluded they had no choice because it was clouding the decision facing growers - they had to defend their position and rebut "misinformation".

Mr Abercrombie said changing the sector's performance would not happen overnight.

"This is the starting point to changing the industry forever. People can't say wool prices for the last 20 to 30 years have been great, but no-one has come up with an alternative. If they did and it worked, then we would be keen to be involved."

Mr Nicholson said WPI was wrong to blame the wool industry structure for the sector's problems and such claims showed a lack of knowledge and experience.

"Blaming the structure of the industry is rubbish. The structure of the wool industry in New Zealand has got nothing to do with the price of wool."

Those problems were caused by a lack of international demand and, recently, by an unfavourable exchange rate, he said.

He also accused WPC of issuing mixed messages.

That included blaming the existing participants for wool's problems but then saying WPC was happy to work with them.

Despite claims to the contrary, the wool industry was united, and the "rift" came from grower-owned organisations trying to control the industry, Mr Nicholson said.

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