SENATORS have agreed to a private briefing on Australian Wool Innovation’s WoolQ trading platform after the research and development body refused to release a key report.
When Senate Rural and Regional Affairs and Transport Committee member Labor Senator Glenn Sterle recently asked if a report by Ernst & Young Port Jackson Partners into WoolQ’s future could be tabled, AWI listed several reasons why it should not release it, but that it could provide a private briefing.
AWI’s case against the report’s release included that it contained commercial-in-confidence information, and that its disclosure might seriously undermine future commercial opportunities for Australian wool growers, dilute the competitive tension around WoolQ’s sale and breach the privacy of parties it identified.
AWI recently initiated discussions with brokers to take over WoolQ, which has struggled to gain wide trade support due to data ownership issues and concerns about sale by description.
Earlier this year, Mr McCullough told the RRAT committee that AWI aimed to get WoolQ into the commercial arena as quickly as it could and test it in the commercial arena. He said AWI sought advice from Port Jackson Partners on “the path forward by way of ownership and by way of operations”.
“We don’t think it’s the right time to put it in the hands of a commercial partner.”
Reasons for this included “liquidity” and the need to complete WoolQ’s blockchain module and its supply chain integrity model, Mr McCullough said.
However, Mr McCullough said although AWI’s shareholders should own at least 51pc of WoolQ, “the commercial world should own the rest, potentially, or operate it.”
“I think that’s a very real proposition,” he told the senators.
More than $6.3 million in growers’ levy funds has been spent on the WoolQ Market platform over the past five years without significant revenue and it has failed to reach an operating target of selling 2 percent of all Australian wool traded in 2019-20.
In a WoolQ sale last Thursday, 33 bales were sold of 449 offered.
“In contrast to the previous two WoolQ auctions, where bales sold well and the flexibility of WoolQ to hold a sale to take advantage of a rising market was evident, in the latest offering bids were consistently below the reserves set for the lots,” an AWI spokesman said.
In a WoolQ sale on 8 July, 603 of 690 bales were sold and on 24 July, WoolQ offered 817 bales and sold 698.
AWI said readers can head to https://www.woolq.com/portal/admin/market/past-auction for further details, including prices for individual lots.
The spokesman said AWI has always been willing to consult with the trade and will continue to do so.
RRAT chair Nationals senator Susan McDonald confirmed today that the committee had agreed to accept an invitation from AWI chief executive officer Stuart McCullough to give a private briefing on the WoolQ report.
Senator McDonald could give no reasons why the committee accepted Mr McCullough’s offer.
“Just that there was general agreement that getting more information from AWI and these programs could only be a good thing.”
Wool grower groups have supported the release of more information on WoolQ, but Senator McDonald said she didn’t have a view on whether AWI should release the full EY-PJP report until she has seen it. She did not know when the briefing would be held.
However, Labor Senator Glenn Sterle said in cases of the expenditure of levy payers’ money “nothing should be a secret.”
“So I find this whole process disingenuous, I find it mischievous, I find it deceptive that they can’t let it out even though it is around their governance and their expenditure of levy payers’ money – it doesn’t wash with me.”
“My view is, what have they got to hide?
“I think there should be a process where it should go back to their board and it absolutely should be available to levy payers — the whole lot — it’s not their money.”
AWI board members are supporting WoolQ
Recent answers from AWI to questions put by the RRAT committee on WoolQ show that AWI board members are supporting the platform, but the number of registered user ‘sign-ups’ is declining.
Australian Wool Innovation told the senators it estimated that for those current or former directors who produce wool, since 1 January 2018, all would fall in the top 30 percent of wool growers in terms of wool levy paid, excluding former chair, Colette Garnsey, who is not a wool grower.
AWI said six current or former members of the AWI board are registered on WoolQ and of the 121 growers who have sold on WoolQ Market, five of those are current or former directors.
AWI submitted data to the RRAT committee that showed the number of registered user sign-ups on WoolQ has declined from a peak of 822 in the second quarter of 2018 to less than 100 per quarter since late 2020.
The breakdown of WoolQ ‘users’ is brokers 275, buyers 249, classers 721, contractors 168, wool grower/farm manager 1866 and wool handler 210.