Hewett said if strong wool prices didn't lift to sustainable levels, more sheep farmers would look at other ways of making money, including carbon farming.
"I'm really excited by this [group]. I think the industry's been crying out for it for a long time. We've been squabbling over the family silver, but quite frankly, we need a new dinner set."
He said New Zealand exported more strong wool than any other nation to the world's leading textile and carpet manufacturers.
"Wool Impact NZ will be a connector and convenor for the strong wool industry and will play a vital role in driving the ongoing development of the sector."
Agriculture Minister Damien O'Connor said he supported the action group's recommendation to establish Wool Impact NZ.
"We're already seeing growth in consumer interest in the benefits of natural fibres as opposed to synthetic products. It's an important time to be unified and value-focused to drive the growth of our strong wool sector," said Damien O'Connor.
- RNZ