AWI chairman Jock Laurie: feels responsible for supply chain’s profitability.

AUSTRALIAN Wool Innovation has defended its multi-million marketing budget — widely criticised as having little or no impact on growers’ wool prices — as formal consultation on strategic planning begins with industry groups this week.

AWI chairman Jock Laurie said meetings in Sydney with the Woolgrower Consultation Group and the Wool Industry Consultation Panel will allow 44 grower representatives to discuss their views on the company’s priorities.

In a media release today, AWI listed the WCG and WICP members, putting breeder groups first and peak grower body WoolProducers Australia last in the groups listed: Asheep and Beef, Australian Association of Stud Merino Breeders, Australian Superfine Wool Growers Association, Australian Wool Growers Association, Broadwool, Commercial Merino Ewe Breeders Association, MerinoLink, state farming organisations and WoolProducers Australia.

AWI and WoolProducers are in dispute over the value of AWI’s wool marketing and how much AWI has spent on campaigns over the last 10 years. Mr Laurie claims AWI has spent $369 million over the last 10 years on marketing, while WPA has calculated the figure as around $500 million. Two recent analysis — including by Independent Commodity Services analyst Andrew Woods and an Episode 3 report commissioned by WPA — have cast doubt on the impact of AWI’s marketing campaigns on growers’ wool prices.

In a media release today, Mr Laurie said this week’s meetings with wool growers from around Australia are important as the company develops its next strategic plan, and he detailed the main components of AWI’s marketing campaigns.

“AWI’s marketing budget is divided three different ways.

“One of them is very much around the defensive campaign, which is in a lot of ways is dealing with things like the PEP legislation, both Environmental Protection legislation in in the European Parliament,” he said.

“We have had to spend a lot of money defending the right to grow wool, to educate people in the parliaments, to educate people in the communities, which is the reason we put the campaigns together.

“The Wear Wool, Not Waste campaign is about defending growers’ reputation, clearly putting facts out there into the environment to make sure that people are properly educated,” Mr Laurie said.

So, we have that and then we have the awareness style campaign which is so proud of the very good example of that where we showcase a lot of the new products that are available.

“We also can clearly demonstrate investment in marketing in China is driving more sales,” he said.

At Wool Week in Melbourne last year, AWI released data it said showed increased wool garment spending in China coincided with its marketing campaigns.

AWI marketing spend is $369m not $500m – Laurie

Mr Laurie said AWI reports in its annual reports each year how much money is spent on marketing over the last 10 years, “it is $369 million not $500 million as some have claimed.”

“That includes all of our overseas staff and expenses overseas, all of our marketing team domestically and our campaigns,” he said.

“We know, the global economic circumstance is a big driver.

“The other drivers are supply and demand,” Mr Laurie said.

“You’ve got energy costs, you’ve got all of those other factors and the slow recovery coming out of COVID is really driving economies down, which is very much affecting the price for wool.”

Mr Laurie acknowledged the difficult seasonal conditions pressures that wool growers are experiencing.

“The market simply is not allowing wool growers to make a profit,” he said.

The AWI chairman emphasized that AWI has been proactive in communicating with brands about the unsustainable prices, which have led to significant market changes.

Mr Laurie said one the industry’s critical issues is the rising cost of shearing.

“There used to be a structured system around shearing costs, but changes have led to costs getting out of hand,” he said.

“AWI is investing in initiatives to regain control over these costs and create a more sustainable environment for wool growers.”

Despite the challenges, Mr Laurie expressed his unwavering commitment to the wool industry.

“I feel the pain that every other wool grower feels right now,” he said.

“As the AWI chairman, I feel a sense of responsibility to ensure that everyone in the supply chain can be in a profitable position.”

However, Mr Laurie said he remains optimistic about the future of the wool industry.

“Wool growing has allowed us to expand our business substantially over the past 50 years.

“We believe in the product, we believe in the industry, and we know there’s a bright future ahead,” he said.