Wool review complete
The most significant examination of the wool-selling system since the digital age is now complete.
Commissioned by the board of Australian Wool Innovation, the Wool Selling Systems Review examined in detail the opportunities for innovation in the exchange of wool from the farm gate until it passes the ship's rail for export.
The estimated total cost of this exchange of wool last financial year has been estimated at about $300 million.
The 68-page report, now available at wool.com/wssr, includes a number of significant findings, including:
·The need for cost savings associated with a merger of the Australian Wool Testing Authority and Australian Wool Exchange.
·Greater transparency of selling costs.
·The potential for a tax-equivalent research and development investment to be made by AWTA given its current tax-free status.
·Potential problems with commission buying arrangements in the auction system.
·A differentiated approach not necessarily requiring sample display of all wool and making greater use, where appropriate, of sale by description.
Many of the issues raised by submissions and others, such as centralisation of selling, could be addressed with an online wool exchange portal.
Such a development would cater for new selling and buying options, enable growers to compare selling options and allow a more efficient exchange of information.
AWI chief executive Stuart McCullough said the review involved some of the greatest competition and business minds in Australia.
"This very significant review was conducted at arm's length to AWI," he said. "It involved almost 100 submissions and many more issues raised from a wide variety of viewpoints and much discussion and debate.
"This review explores some great opportunities to reduce the cost of selling wool for growers, reduce the barriers for those wanting to buy wool and to help bring the wool industry into the digital age."
The Wool Selling Systems Panel included Fox & Lillie managing director James Lillie; Graeme Samuel, Monash University's business school, consultant Bernard Wonder and William Wilson, director of Australian Investor Relation Services.
The Wool Selling Systems Report will now be discussed as part of ongoing consultations with shareholders.
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