A Christchurch wool exporter is considering closing down his New Zealand processing plant and moving to Melbourne if Cavalier Wool Holdings buys the wool scouring assets of New Zealand Wool Services International and disposes of the trading arm.
"If this takeover and resulting monopoly proceeds, it will cost our company an additional $200,000 to $300,000 a year of increased charges, which I am not prepared to accept," John Marshall and Co managing director Peter Crone said in a statement.
Godfrey Hirst, New Zealand's largest carpet manufacturer, has already said it would be looking at relocating some of its manufacturing operations offshore, following the High Court dismissal of its appeal over the Commerce Commission's decision to grant authorisation to Cavalier to make an offer for Wool Services' scouring assets.
The New Zealand wool industry would lose a "pivotal asset" if Cavalier stripped the scouring operation out of Wool Services and disposed of the trading arm, Mr Crone said.
Both the Commerce Commission and the High Court had under-estimated the costs and over-estimated the benefits to the overall economy that would result.
"I am sure wool growers will become very angry when they realise the implications of this CWH monopoly for the future of their industry.
Growers have consistently said they want to invest and have an ownership stake in a vertically integrated, large-scale wool industry player and WSI fits this profile. Now there's a threat WSI will be dismantled and abandoned," he said.
Sixty-four percent of the company was owned by Plum Duff and Woolpak Holdings, which had become caught up in the South Canterbury Finance collapse and was under the control of a receiver.
Wool Services recently said woolgrowers strongly supported the vertically integrated model and it would test that support with a capital raising "in the near future" to buy those shareholdings from the receiver.
