A strong crowd turned up at the Wools of New Zealand meeting.
The wool industry is broken.
That's what Wools of New Zealand CEO John McWhirter has told farmers in Dannevirke in a roadshow.
While the proposed merger between Wools of New Zealand and Primary Wool Co-operative was a topic of discussion, the main issue was where the problems in the industry were and how the industry players were planning to fix them.
Primary Wool Co-operative chairman Richard Young addressed the issue of the merger, which is to be voted on in November.
"We were both participants in an industry that wasn't performing and to stay there and do the same thing was dumb, and to stay there and do the same thing and expect a different result was even dumber.
"We weren't prepared to do that as two companies, hence we started talking a year ago."
Young said the merger was about bringing two complementary businesses together and two complementary businesses would be great together.
Wools of New Zealand chairman James Parsons said the roadshow was not about a vote.
"It's a bit of information in terms of understanding how things could work.
"We're not here beating our chests and saying we're amazing and we're going to turn it all around tomorrow, but what we are here to do is say where we see the problems in the sector, tell you some of the things we're doing to turn that around and asking you to support us in that journey."
He said one of the problems was in the supply chain, adding that growers were supplying an ingredient, a bit like selling flour to make bread, which was then sold in a supermarket.
"Most of us as consumers actually don't know what flour is used to make that bread. "
Parsons said what Wools of New Zealand had done was attach the brand to the wool before selling it on to a spinner or carpet manufacturer and tried to ensure that they carried the brand.
"It's a good brand, but what we really struggle with is to get them to carry that right the way through to the consumer and, importantly, to make sure we capture the value.
"What we need to do is start to sell the bread, not the flour, and attach our story to the bread, not the flour.
"With the carpet that we're now selling through retailers, what we have is growers as our suppliers, supplying wool to Wools of New Zealand.
"We then export that wool to a carpet manufacturer, they then send the carpet back to us in New Zealand."
The carpet was then sold through a retailer.
McWhirter said wool production had actually been in decline.
However, the biggest problem was the demand for wool had dropped with more customers buying plastic products.
This meant there was an oversupply of wool.
"If you go back to 1996, soft wool sales of carpet in New Zealand was over 90 per cent. Plastic carpets were less than 10 per cent. In those days prices were different.
McWhirter said the current issue was that 85 per cent of sales of soft wool coverings were plastic, nylon or polycotton, which left 15 per cent of the market share being wool carpet.
"What's effectively happened between 1996 and 2020 is plastic has taken the market from wool. Fundamentally, that's the problem we're dealing with.
"The industry is broken. We're not making money and the industry is broken. Farmers are looking for a new direction."
McWhirter told those at the meeting the goal was to increase demand for wool and they wanted to do that by creating a viable commercial business that would endure.
He said the main purpose of the strategy was to solve the problem of overproduction, ensuring an increase in the price of wool and returns for farmers.
The response from the roadshow had been positive with farmers supportive of the strategy.
The roadshow finishes this week and more information about the merger will be released later in the year.