The most significant examination of the wool selling system since the digital age, is now complete.
Commissioned by the Board of Australian Wool Innovation (AWI), the Wool Selling Systems Review has 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 on wool.com/wssr includes a number of significant findings or recommendations including the need for:
Cost savings associated with a merger of the Australian Wool Testing Authority (AWTA) and Australian Wool Exchange (AWEX), greater transparency of all selling costs, the potential for a tax-equivalent R&D investment to be made by AWTA.
Given it’s current tax-free status potential problems with the current 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 amongst the submissions and others such as centralisation of selling could be addressed with the development of an online wool exchange portal.
Such a development would cater for new selling and buying options, enable growers to compare available selling options and a more efficient exchange of information.
AWI CEO Stuart McCullough said the review involved some of the greatest competition and business minds in Australia.
“This very significant review was conducted at arms length to AWI. 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 AC, Monash Business School, Monash University; Bernard Wonder PSM, consultant and director; and William Wilson, director of Australian Investor Relation Services.
John Roberts, director of Eubindal Pty Ltd was the executive officer and secretariat for the panel.
The Wool Selling Systems Report will now be discussed as part of ongoing consultation with shareholders.