Merino wool suits Italian fabric maker

Merino wool with the Zque mark has met strict environmental and animal welfare standards and can be traced to the farm it came from. Photo / Supplied

The New Zealand merino industry is hopeful a new deal with an Italian fine suiting fabric maker will be the start of things to come.

REDA, based in Biella, Italy, has signed a contract with The New Zealand Merino Company to buy only Zque qualifying fibre.

Wool with the Zque mark has met strict environmental and animal welfare standards and can be traced back to the farm it came from.

REDA has purchased New Zealand merino for many years, but this is the first time it has agreed to use only fibre that's proven as environmentally friendly.

The Italian company will pay a premium for the wool - around 20 per cent more than would be achieved at auction, The New Zealand Merino Company says.

Demand for quality suits had been hit by the global recession and manufacturers were looking for ways to differentiate their products, chief executive John Brackenridge said.

There had been a "social correction" along with the economic one and people now had a desire for things that were natural and sustainable. Zque's clean green story would help REDA capitalise on that. "This whole idea of differentiation around something real is a significant point of difference."

This kind of positioning was the only way forward for New Zealand primary products, he said.

The New Zealand Merino Company [NZM] sells about $105 million worth of wool a year, most of it exported.

It accounts for 80 per cent of the country's fine wool clip, and two-thirds of that is now Zque qualified.

Ten years ago virtually all New Zealand merino was sold by auction into a commodity market, and fetched lower prices than the Australian product, Brackenridge said.

NZM had worked hard to get its customers into direct supply contracts such as REDA had just signed, and 51 per cent of its volume was now sold that way, he said. REDA had bought $15 million worth of New Zealand merino over the past three years and there was good potential for that to grow.

NZM also supplied two other Italian fabric manufacturers who had yet to sign up to the Zque model.

As part of the campaign to raise the profile of Zque, REDA and NZM are bringing a group of Italian fashion and business journalists to New Zealand next week to tour merino stations and sample South Island luxury tourism.