Rethink needed on AWI wool levy spend

Generic spending on wool marketing needs a serious rethink according to one industry leader who thinks there are better ways to spend levies.

Less of wool grower levies needs to go to marketing and more to improving on-farm research, according to the growers' peak body as the industry continues to face bleak prices.

While the Eastern Market Indicator closed the year up slightly at 1154c/kg clean, it was still tracking lower than at the same time the year before where it finished December sales at 1212c/kg.

Wool Producers Australia chief executive Jo Hall said there needed to be a change to spending by Australian Wool Innovation around marketing and research and development.

“The 60:40 marketing to R & D ratio has been in place for over 10 years now, with $365 million spent on marketing, and it is safe to say that it is not yielding the results that would have been anticipated,” Ms Hall said.

“With the announcement of the WoolPoll results in November and growers again determining that 1.5 per cent is the appropriate amount of levy they wish to allocate for research, development and marketing for the next three years, it is time for some new and bold thinking from AWI.

“It is now incumbent for AWI to cut their cloth to fit their budget, just as growers have had to do and will have to continue to do until the market turns around.”

Ms Hall said AWI needed a “significant shift” in the way the company was run.

She also said the marketing/R&D split needed to change.

“The average EMI 10 years ago was 1099c/kg, and for the 2023-24 season it was 1155c/kg – this is not enough to keep people in the industry, particularly in light of increased input costs and labour challenges,” she said.

“The focus on the weighting of marketing needs a serious rethink as it has been proven time and again that generic marketing does not work.”

Ms Hall said it made more sense to spend more of the compulsory levy on things growers could control on farm.

She said a recent report, commissioned by AWI, showed there was a large gap in returns between the top and average producers, and things those not performing as well could pick up.

“Common sense would suggest that making woolgrowers more efficient to reduce cost of production to not only counter rising input costs and volatile prices but to actually turn a profit, would be a better spend of levies,” Ms Hall said.

“It may help halt the loss of hectares to competing industries and stem the exodus of growers from industry.”

An AWI spokesman said the organisation consulted “widely and regularly” with industry representative bodies and there were “varying views across the industry on this matter”.

AWI would consult with the Wool Industry Consultative Panel and the Woolgrower Consultation Group for the company’s next strategic plan in February next year. The new plan will come into play in July 2025.