THE future of Australian Wool Innovation’s WoolQ platform and its wool trading arm will be discussed with the industry, according to new AWI chairman Jock Laurie.
After Mr Laurie’s recent appointment to the top AWI role, Sheep Central asked him if continuing to fund WoolQ to duplicate services provided by online selling platforms such as AuctionsPlus or via Zoom, and established integrity systems, was an efficient use of grower levies.
Mr Laurie replied that the decision to develop WoolQ was made seven years ago.
“There is quite a bit of traceability stuff that is going to be involved in the WoolQ program which is starting to line up with all of the things that we are hearing they are requiring in some of these overseas markets..
“I think there is some very good stuff there.”
Mr Laurie said WoolQ’s wool-selling platform has held several online sales.
The latest of these was held late last month, in the absence of a physical Western Australian auction, when WoolQ Market was used by a WA broker to offer 817 bales and achieved a 75 percent clearance.
“There will obviously be discussions about where we take WoolQ and where we take that component of the platform,” Mr Laurie said.
In late March this year AWI told senators on the Rural and Regional Affairs and Transport Legislation Committee that it had spent $6.3 million in growers’ levy funds on the WoolQ Market platform over the past five years, but it has failed to generate any revenue. AWI’s 2019-20 annual operating plan had an operating target of 2 percent of all Australian wool to be traded by the WoolQ marketing tool, but sold less than 1pc, or 939 bales of 32,437 bales created on the platform.
When asked again if WoolQ represented efficient use of grower levy funds when there was no market failure in the areas of online wool selling and traceability, Mr Laurie said the board will “sit down and have a look.” He repeated that the WoolQ investment decision was made by the AWI board about seven years ago.
“A lot of the development of that stuff has already been done and the board will be sitting down and having discussions about WoolQ.
“It will continue to have discussions around WoolQ and I think it is also important that we sit down and talk with the broader industry in regard to WoolQ and where it fits in,” he said.
“We’ve got to have those discussions, I can’t give you any more at the moment until we sit down and do that work.”
Mr Laurie and former directors use WoolQ
On May 27 this year, AWI chief executive officer Stuart McCullough told Nationals Senator Bridget McKenzie at Senate Estimates that he was aware that some former board members and current board members trade their wool on that platform, but he was unsure if they were among the top 30pc of growers who produce 80pc of Australia’s clip. Sheep Central is aware that former AWI chairman Wal Merriman has offered wool for sale on WoolQ.
Mr Laurie said there will be directors who are using it.
“There will be past directors who are using it, who see the value in it.
“I’ll be selling my wool on it, and I know other directors have also done so.”
Mr McCullough said AWI’s consultation on WoolQ over the previous 12 months had been largely with brokers, wool growers and exporters.
Mr McCullough said AWI aimed to get WoolQ into the commercial arena as quickly as it could and test it in the commercial arena.
“There is good reason that we haven’t moved this into the commercial arena.
“We sought advice on that from Port Jackson Partners as to 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.”
Mr McCullough said one reason for this was liquidity.
“One was that we were still building modules for this—the blockchain module and the supply chain integrity model.
“We think it’s better to get them completed,” he said.
“There is no doubt that, with ownership of this in the future, the shareholders—because they paid for it—should own at least 51 per cent, but the commercial world should own the rest, potentially, or operate it.
“I think that’s a very real proposition.”
Mr Laurie agreed: “That’s where it will go.”
When Senator’s McKenzie suggested AWI didn’t believe WoolQ was operating as a commercial service at the moment, Mr McCullough said:
“No. We had a wool auction a few weeks ago that sold 342 bales or something like that.
“That was the first sale where we actually charged for the service,” he said.
Senator McKenzie requested that AWI come up with annual figures on the number of WoolQ users, including growers, exporters, brokers and transporters.