AUSTRALIAN Wool Innovation is prepared to consider changing its expenditure split between wool marketing and other research and development, company chair Colette Garnsey told shareholders last week.
At the AWI annual meeting in Sydney last Friday, Former AWI director and New South Wales wool grower Paul Cocking asked if the expenditure split between marketing versus research and development remained at 60:40, if there was a 5 percent variance allowance, and would growers get some input into its potential change.
“I’m interested if growers will get a say in that split in the future,” he said.
But Wally has already said no…
Despite former AWI chairman Wal Merriman last month maintaining before his resignation that the current budget expenditure split — 60 percent to marketing and 40pc to research and development – would not be changed under a 1.5pc levy, Ms Garnsey said it could be considered.
Mr Merriman told Sheep Central that AWI could not propose a cut in non-marketing programs in favour of marketing, because it went into the 2018 WoolPoll ballot with a 60:40 split.
“We can’t, because we’re on the 60:40 split, so we can’t change that.
“Because the growers have voted on it – they’ve been given this proposition of all the different percentages at a 60:40 split and that binds this board then,” he said last month, before growers voted to reduce the compulsory wool grower levy from 2pc now to 1.5pc from 2019-2022.
Current 60:40 split has ‘delivered enormous benefits’ – Garnsey
Ms Garnsey told AWI shareholders last Friday the 60:40 expenditure split had produced enormously valuable results for growers.
“The increased (marketing) investment that we’ve been able to put into the Northern Hemisphere cold climate countries has really delivered enormous benefits.
“It has really assisted with the demand that we are seeing; where wool is now on the world stage, it’s considered as a fibre of choice, consumers are asking for it and your wool is in the garments of some of the best brands and the most significant garment designers in the world,” she said.
“And I think that’s a significant achievement.
“The 60:40 we feel is right … and you can see there is a consistent solid investment in the R&D that is occurring in your company,” she said.
AWI chief executive officer Stuart McCullough said the company’s expenditure was “plus or minus one percent” of the 60:40 split.
Ms Garnsey indicated adhering to the 60:40 split “is a bit like landing a 767 on a five cent piece”.
“We haven’t had message from our grower base to change that split, but as I spoke earlier today, we will embrace far more consultation.
“And I think in these consultation forums that we will have over the course of the next, certainly the next few months and the next year, and over the next three year period, this is something that we are more than open to discussing with our growers,” she said.
“The strong sense that I have from my visits into rural Australia to be with our growers is – ‘don’t change it, continue to invest’.
“Now if those messages change, we are always going to listen to our shareholders – it’s your company and if you want us to change it, that’s something that we would consider, of course.”