Wool sector overhaul: PGG Wrightson winds up Napier auction operations

PGG Wrightson says it believes moving the wool auction to Christchurch is in the best interests of growers. Photo / Mike Scott

By Monique Steele of RNZ

Major wool broker PGG Wrightson will no longer hold wool auctions in Napier, after more than 140 years.

The Hawke’s Bay city has hosted the firm’s wool auctions since the late 1800s, as a hub for the North Island supply.

In the shadow of historic booms for wool - once considered the backbone of the New Zealand economy - the major broker will consolidate its auctions to a single national auction system in Christchurch, from May.

PGG head of wool Rachel Shearer said the difficult decision was about improving the resilience and sustainability of the wool sector.

“The amount of shearable sheep in the world and in New Zealand is at a record low, which also means the volumes of wool that are coming forward to be traded are also at a record low.”

Shearer said the company’s previous owner, Williams and Kettle, held its first Napier auction in 1880.

“It’s a long heritage which we’re very proud of, but the industry is changing significantly, and we recognise that we need to change with it.”

She said the team of 20 in Napier would not be subject to job losses, but they were disappointed.

“We are ready for the challenge and wanting to do what’s best for our loyal sheep farmers, and so understanding the bigger picture of the industry changing and us needing to change is the overarching thought.

“But understandably, some people are disappointed to see the end of an era up in Napier.”

Further wool industry consolidation

High shearing costs, low profitability and challenging market conditions were driving a decline in the number of sheep in New Zealand.

StatsNZ figures showed there were 6 million fewer sheep in the decade to June last year, falling 21% to 23.6m sheep.

Last year, there were a number of structural changes within the sector, too.

In September, the new Wool Alliance was established between groups Campaign for Wool NZ, Wool Impact, Wool Research Organisation of New Zealand and Beef + Lamb NZ.

It aimed to collaborate and develop a long-term strategy for the viability of the sector.

Then in October, major carpet manufacturer Bremworth announced it entered into a new ownership agreement with Floorscape, a wholly owned subsidiary of Mohawk Industries, the world’s largest flooring company.

The deal with the United States-based company, which already owned brands Godfrey Hirst and Feltex, would consolidate carpet manufacturing into a single owner, but it was still subject to regulatory approvals.

In the months prior, under new leadership, the listed company abandoned its commitment from 2020 to use only woollen fibres over synthetic fibres.

Christchurch to host PGG auctions from May

Shearer said Christchurch was selected as it could attract the greatest number of buyers, including international buyers with access to the airport.

“We want to get growers’ wool in front of the most possible buyers to look at the wool and to get as many buyers as we can in the room to compete for the wool.

“We believe it’s in the best interests of our growers.”

She said its North Island wool would continue to be scoured and stored in Napier, but samples would be shipped down to Christchurch for the sales.

PGG’s new system will begin in May.

PGG Wrightson head of wool Rachel Shearer. Photo / PGG Wrightson

Wools of NZ to follow suit

Another broker, farmer-owned co-operative Wools of New Zealand, also held auctions in Napier and Christchurch on behalf of its growers.

It announced this week that it will also move to a single national auction system, as PGG was set to do.

Chief executive John McWhirter said structural change was necessary for the sector to remain viable.

“Our growers also expect us to be proactive and to help lead changes that support a strong and sustainable future for New Zealand wool,” he said.

It will discuss the changes with wool growers in the coming weeks.

- RNZ