Marketing levy draws criticism

Elders' David McPherson sorts wool. Elders says it has no plans to introduce a fee on a farmer's clip.

Wool marketing company Wool Partners International launches its new sustainable brand for carpet wool in northern Europe this week, amid criticism of a 3 per cent marketing levy it is charging farmers.

As the PGG Wrightson-backed company exhibits at the massive Domotex exhibition in Germany where Laneve is being unveiled, wool exporters and rival Elders have criticised the way the initiative is being funded.

From this month, Wool Partners has asked its farmer suppliers to pay a 3 per cent Wool Market Development Fee on their clip, to finance the repositioning of New Zealand carpet wool.

The New Zealand Council of Wool Exporters has described the levy as "trickery", saying the request was hidden among the Christmas mail with a short response time.

It alleges the accompanying brochure made claims about Wool Partners and its achievements that were "simply not true".

Elders Primary Wool, which has its own luxury wool brand Just Shorn, issued a statement saying it had no intention of introducing a similar fee.

"It is not part of Elders Primary Wool's strategy to impose additional costs on growers for funding offshore marketing at a time when the industry is struggling with historically low returns," chairman Stuart Chapman said.

Elders was launching Just Shorn at no additional cost to growers, he said.

Last year farmers voted to discontinue paying an industry levy to Meat and Wool New Zealand.

Wool Partners chief executive Iain Abercrombie said it had done its research and farmers supported the voluntary levy.

In an online survey of 150 growers last year, 85 per cent said they should contribute to strong wool marketing. The fee, which would generate about $4 million a year, was a small amount for a $600 million industry.

"You can't create demand for wool if you're not going to spend money on your brand," Abercrombie said.

Two weeks after the German event, Wool Partners would launch the high end, luxury Laneve label at North American industry expo Surfaces in Las Vegas.

Wool Partners had 122 Wools of New Zealand brand partners and 35 manufacturers and retailers signed up to Laneve.

It was ready to aggressively differentiate wool carpet from synthetics for the first time "as opposed to just doing generic industry good activity, which is really where the levy money was spent in the past".

He claimed Elders did not need a marketing fee because it did not have a marketing infrastructure in place.