AWI chairman Jock Laurie: doesn’t want to divide the industry over AWI’s marketing expenditure.

AUSTRALIAN Wool Innovation chairman Jock Laurie has suggested changing the company’s marketing versus research and development spending ratio might divide the industry.

At the AWI 2024 annual general meeting today, Mr Laurie was asked if due to the lack of grower price impact of AWI marketing, the current marketing versus research and development split of 60:40 would be maintained or if there was cause to wind back the marketing spend.

In 2021/22, AWI spent $38.5 million on marketing; $41,85m in 2022/23 and $29.59m in 2023/24.

WoolProducers Australia president Steve Harrison, on hearing today that the wool levy would be maintained at 1.5 percent, said serious consideration must be given to the current marketing: research and development spending split, that has been in place for 10 years.

“While understanding that the promotion of wool is important there seems to be very little impact on prices paid for wool off the back of this level of marketing expenditure, would looking at ways to increase efficiencies at a farmgate level, as per the AWI commissioned Agrista report, be a better way to improve the viability of wool growing?” Mr Harrison said.

“It is up to AWI to maximise the money that wool growers have committed for AWI to expend on their behalf.”

After the AGM, Mr Laurie told Sheep Central the AWI board would “have a look at everything.”

“I think the 60:40 split is really interesting.

“So, we’ve probably got as many people who want 100 percent of their money spent on marketing as we have who want 100pc of their money spent on research,” he said.

“And there are a lot of people in the middle who want a mix of just wherever it lands it doesn’t matter.

“The issue for me has always been, especially in flat economic circumstances like there is now, I think the expectation that handful of millions of dollars that we spend on marketing is going to shift the dial in world economies … it’s great that people think we have that much power, but unfortunately we don’t,” he said.

“But what we are doing is I think keeping wool very relevant; we’ve got a lot of brands coming to us, I think we are getting it positioned well into the future.

“The trouble is that it is really difficult to measure that and I don’t think we’ve got any metrics that sort of says that what we are doing now is setting us up particularly well going forward,” Mr Laurie said.

“I think the 60:40 split, and we spoke a bit about it yesterday at the board, we don’t want to divide the industry on an issue.

“There is a lot of discussion around it, as I say, and we will have more discussions I think next year about it, just to make sure that we are comfortable with that split, and obviously that will include talking to a lot of people.”

Mr Laurie rejected a suggestion that the WoolPoll levy result was a ‘get out of jail card’ for AWI.

“I don’t whether I would call it a ‘get out of jail’ card; I’m very encouraged, with the industry where it is at the moment, with the things that are happening in Western Australia, the season as bad as it’s been through southern Australia, with the market as flat as it is, the cost of production where it’s going, a high percentage of people wanting to invest more money in the industry I think is very encouraging.”

Mr Harrison said now that a 1.5pc levy result has been delivered, it is up to AWI to invest this money wisely on behalf of Australian wool growers.

“With the planning for the new strategic cycle underway for the 2025-28 period underway, it is incumbent on the AWI board to turn their minds to safeguarding the future of the wool industry and making tangible changes to the direction of the company,” Mr Harrison said.

WoolProducers said the 2024 WoolPoll Voter Information Memorandum outlined what programs would be funded or cut going forward dependent on what levy rate was selected and referred largely to programs that have been in place for many years.

“What was disappointing to see in the VIM was that there was no new thinking, no new approaches to how R&D and marketing would be done.

“Given that we have growers currently exiting the industry due to low returns we expect AWI to undertake a radical change in thinking and approach for the company for the next strategic cycle,” he said.