News

AWI ignores national wool grower calls for 1pc levy option in WoolPoll 2018

Terry Sim, August 17, 2018

AWI CEO Stuart McCullough at the recent Australian Sheep and Wool Show.

AUSTRALIAN Wool Innovation has ignored grower calls to include a 1 percent option in the WoolPoll 2018 options to be announced next week, despite a recent claim the company was listening to its levy payers.

Sheep Central has learned that the WoolPoll 2018 levy options to be voted on by AWI shareholders will include the options of 0, 1.5pc, 2pc, 2.5pc and 3pc.

Several sources have also confirmed that WoolPoll 2018 panel members were not provided with the levy options suggested by the various industry groups and these were sent direct to AWI, which decided the 2018 options without recommendations from the panel.

WoolPoll regulations state that it is the AWI board’s decision on which options are put to growers; however, in previous WoolPolls the panel has made recommendations to the AWI board after reviewing industry body submissions.

Peak grower and breeder bodies wanted 1pc option included

The peak wool grower body WoolProducers Australia, the Australian Association of Stud Merino Breeders, the Australian Wool Growers Association of Australia and the Victorian Stud Merino Sheep Breeders Association submitted that the 2018 options be 0, 1pc, 1.5pc, 2pc and 2.5pc. These options were also supported by WAFarmers. The Victorian Farmers Federation submitted the levy options of 0, 0.5pc, 1pc, 1.5pc and 2pc. Sheep Central has been told responses from Australian Superfine Wool Growers Association members varied between, 0, 1.5pc and 2pc, though no formal submission was made to the WoolPoll panel.

Earlier this month, weeks before the scheduled online release of the WoolPoll 2018 options on August 20, AWI chief executive officer Stuart McCullough leaked in an exclusive interview to Fairfax Agricultural Media that 1.5pc would be an option. In WoolPoll 2015, the AWI board ignored a national grower call for the inclusion of a 1.5pc option.

“We really listened to what wool growers had to say when their views were put forward through the WoolPoll panel,” Mr McCullough said this month.

Mr McCullough also suggested that the likelihood of lower wool production in 2018-19 could impact levy revenue, adding that the levy option decision was not just a value proposition, but a volume proposition as well.

The AWI CEO’s confirmation of the 1.5pc option was followed last week by AWI chairman Wal Merriman telling The Weekly Times in an exclusive interview that he will push to maintain the levy at 2pc.

“Two percent got us here and I think 2pc will keep us here,” he said.

AWI CEO and chairman levy leaks ‘inappropriate’

WoolProducers Australia chief executive officer Jo Hall said she was not aware of the WoolPoll 2018 options, but she believed it was not appropriate that commentary is being provided on some of the options at this point in time, without other key information being provided.

“If some of the options are being spoken about publicly, it doesn’t make much sense why the rest of the options aren’t also being revealed.

“Given that 0pc must be an included as an option under the regulations, and the chair and CEO of AWI have confirmed that 1.5pc and 2pc will be included that only leaves a maximum of two other levy options to be announced,” she said.

“I have read that the levy options will be released around the end of August, but should this have happened earlier, and at the least, before the CEO and chairman made their recent statements about 1.5pc and 2pc.

“WPA believes that it is important to give growers as long as possible to consider this important decision, as some representatives of AWI are currently making arguments for and against the known options that will be put forward, then it would be far more appropriate that all options are released to growers,” Ms Hall said.

Ms Hall said WPA is not aware of all of the levy options, but there several reasons for body’s 2018 levy rate options.

“Given that the total combined percentage of votes in both the 2012 and 2015 WoolPolls for 2.5pc and 3pc levy rate options did not exceed 7pc (6.95% in 2012 and 6.69% in 2015), there is zero justification for two levy rate options above 2pc.

“Whilst woolgrowers should be offered the option to increase the amount of levy paid, the figures highlighted above suggest that 2.5% is an adequate option and provides an incremental increase for growers to consider,” she said.

Ms Hall said WoolProducers also believed that status quo should be offered to growers.

“1.5pc must be included as a levy rate option for wool grower consideration in order to provide a reasonable option to decrease the levy without having to consider the extreme step of halving or ceasing the levy contribution.”

WoolProducers wants full WoolPoll review

Ms Hall said WPA presumed that its suggested options would be considered by the WoolPoll Panel, as it was the WoolPoll chair Sid Laurie that requested WoolProducers’ suggestions.

“WPA feel that it is inappropriate that the board of the body that is in receipt of the compulsory levy is the only one that decides the options for shareholders, whilst also being able to lobby for a particular option during the WoolPoll process.

“It is for these reasons as to why WPA has been calling for a complete review of WoolPoll, including the regulations by which it is governed,” she said.

Separate rules for growers and AWI – Oppenheimer

AWGA director and member of AWI’s Industry Consultative Council Martin Oppenheimer said more time was needed to debate the WoolPoll 2018 options and he argued for an earlier release of the voter information kits, due to be published online on August 20.

WoolPoll 2018 voting will take place over a six-week period between 17 September and 2 November this year, and the results will be announced at the AWI annual general meeting on 23 November, and take effect from 1 July 2019.

“We were asking for time for the industry to debate the options, so we needed to know early the information surrounding WoolPoll and we don’t understand why it’s a state secret about what the options are and about what the AWI recommendations are,” Mr Oppenheimer said.

“There is a rule for the ICC members, a rule for the WoolPoll panel members, but there’s another rule for the chairman and the CEO.

“So we want the information early, why is there an embargo on the voter information kits?” he said.

Mr Oppenheimer said AWI considered releasing the kit to him if he could ensure he respected the embargo.

“Yet for the CEO and the chairman, there isn’t an embargo.

“Why can’t we have the projections for the income and expenditure of the company for the different options, why hasn’t it been available for months?”

Mr Oppenheimer said the AWI CEO and chairman’s release of the two of the 2018 options was not appropriate and the voter information kits should have been available before their statements were made.

“It does not fit in with any of the protocols, it doesn’t fit in with the rules of WoolPoll; they just do and say what they want.

“There is one rule for them and one rule for the rest of us,” he said.

“If we want transparency then the financials of AWI and the projections for WoolPoll should not be a state secret.”

He was concerned that the short time for debate on the WoolPoll options could lead to a poor decision by shareholders.

Mr McCullough refused to answer questions as to whether he considered it appropriate for him and Mr Merriman to release details of some WoolPoll 2018 options before the general release to shareholders. He confirmed that 1.5pc was an option and the full levy option release date would be Monday 20 August. Mr Merriman did not return Sheep Central’s calls.

HAVE YOUR SAY

Your email address will not be published.

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. David McKenzie, August 19, 2018

    It would seem that AWI is definitely not listening and is out of touch with the average commercial wool grower. And with so many affected by the current drought, it seems that AWI only have their eyes on the significant windfall that a 2 percent levy will deliver. If AWI will not accept input from grower organisations, that only erodes grower confidence in AWI.

  2. Chick Olsson, August 18, 2018

    There are now only two preferred options for any commercially-minded wool grower.
    1. Zero, allowing AWI to become a proper public company, with tradeable shares on the ASX.

    2. 1.5 percent, which will bring in the same revenue as the previous 2pc levy did. To ask for any more is just a form of soft piracy.

  3. Doug Wright, August 18, 2018

    Paying a levy is one thing, the other is getting a return. The maximum amount that I could consider is 1.2 percent; that is with 60pc going to marketing and promotion and the remainder of the current levy going to research. I am not seeing anything being done that will take the industry forward.
    I am more than happy to contribute to progressive projects that lead to the industry moving forward. It is up to the industry to stand up and to say enough is enough of living in the past. Actually in the direction is going now, it may be heading for cottage industry status.

  4. Jim Gordon, August 17, 2018

    From a frustrated commercial sheep producer’s point of view:
    The Victorian Farmers Federation have submitted the best levy options of 0%, 0.5%, 1%, 1.5%, 2%.
    AWI take notice, why can’t growers get the options they want? How do we stop AWI dictating terms?
    Most wool growers want a fair, transparent, democratic representative organisation — instead we are at the mercy of AWI’s self-interest.
    It seems our only solution, is for wool growers to stand up, take note, and most importantly vote.
    Levy voters – think about it!

Get Sheep Central's news headlines emailed to you -
FREE!