AWI spends $365 million on marketing but wool price down

Australian wool growers have forked out more than $365 million for marketing in the past decade but are receiving the same prices they were 10 years ago.

Australian wool growers have forked out more than $365 million for marketing in the past decade but are receiving the same prices they were 10 years ago.

Last week, the benchmark Eastern Market Indicator closed at 1098c/kg clean – almost exactly the average indicator price of 1099c/kg paid in 2014-15 selling season.

The revealing figures come as Australian Wool Innovation, the industry’s research, development and marketing body, asks growers to vote for an increased levy of 2 per cent in WoolPoll, up from the current 1.5 per cent.

The total marketing outlay over the past decade was provided by AWI to The Weekly Times and has ranged from $29m to almost $42m annually, with the biggest spend in the 2022-23 financial year.

Wool prices are exactly the same as they were a decade ago, despite a $365 million spend on marketing.

In the past two years alone, AWI spent a combined $71m on marketing. In that time, the EMI lost 20 per cent of its value, from 1430c/kg to 1142c/kg.

Wool Producers Australia president Steve Harrison said it was difficult for growers to see the spend had been a valuable return on investment.

“We have an EMI that is where it was 10 years ago, and we have lost share in the global apparel market,” Mr Harrison said.

“It’s certainly a lot of money, year on year on year, and I wouldn’t be surprised if more than that had been spent.”

Mr Harrison said he believed growers would not know the extent of the marketing spend and would be surprised at the total figure.

“What is interesting is that two other major producers of wool – New Zealand and South Africa – do not have a levy and in South Africa’s case, their wool prices have gone up,” he said.

There are no wool levies in New Zealand or South Africa, while Australian growers pay 1.5 per cent of their clip funds to support research, development and marketing.

WPA has not made a recommendation on what wool levy they believe growers should pay and denied it was “fence sitting”.

“We decided there was not enough information to make a recommendation on the wool levy amount and while we may cop criticism, we felt in the current climate of low prices that this was a decision that people needed to make individually,” he said.

AWI defended its marketing spend with chief executive officer John Roberts saying wool, like other commodities, was not immune to global economic trends.

“Current sluggish economic conditions in China, Europe and North America is limiting demand for consumer spending, articularly on a discretionary spending on a luxury item like a wool product.” Mr Roberts said.

“A lot of the project work we do is in defending the fibre from fast fashion.”

Mr Roberts said the $365 million marketing spend included all costs for marketing activities including staff.