Wool growers struggle to make ends meet as it needs stronger market

Australian Wool Innovation (AWI) at its last annual general meeting had announced that the Australian wool clip had increased in value by $800 million in five years. Yet wool growers are struggling to make ends meet.

As the wool price continues to fluctuate at narrow profit levels and the bleeding of producers to other enterprises such as prime lambs continues.

Italian fashion label Ermenegildo Zegna, like many other luxury brands and a long-time supporter of wool reported strong growth in 2011 and 2012, but this was increasingly from regions such as Latin America and Africa, with the rate of growth in China coming off the boil.

China’s climate was suited for wearing wool. But, the Chinese are suckers for brand names, because they like to convey success through appearances.

Maintaining consumer familiarity with wool is important, but when logos like Woolmark are used to identify Australian wool, the purchaser is still buying the product for the Gucci or Zegna brand. The money is in the branding, not the wool.

Growers made it clear at last year’s wool poll that they see a need for a body such as AWI through their majority decision to retain a two percent levy.

But AWI needs a better way of positioning wool where it holds the money; not trying to piggyback on somebody else’s brand and watching them take home the lion’s share.

India, despite its potential to grow as a processor, are not into it. Nor are most developing regions of the world.