Wools of New Zealand (WNZ) chairman Mark Shadbolt said it was not the role of a commercial business to recommend to shareholders how they should vote on what was essentially a political proposal.
“But when you look back at history and the millions of dollars of levy money wasted, you’d need to have a high level of confidence in how any new money was going to be spent and managed and to see a real business plan in place,” he said.
WNZ shareholders had made a five-year commitment to contribute funds from their wool returns to assist in its commercial activities and the company would be concerned if its members were going to be asked to pay twice, Shadbolt said.
He and Primary Wool Co-operative (PWC) chairman Bay de Lautour doubted the merits of a referendum remit at the Beef + Lamb NZ annual meeting passed by the votes of about 14% of all farmers, representing about 24% of sheep numbers in NZ.
De Lautour believes a commercial structure, large enough to involve most farmers, would generate enough money to fund the industry-good activities planned to be covered by a levy.
He would like PWC to be that structure. It had already funded several Campaign for Wool promotions and had plans for a major Wool Week promotion in the major NZ cities, he said.
“My view is that past levies have probably been manipulated by interest groups. It is hard for a board to pick winners and they get lobbied by different groups.”
PWC is discussing a potential merger with Wool Equities, which has been unable so far to make profits for its 9000 or so mainly farmer shareholders.
PWC is profitable but has only about 1200 shareholders.
Together they could provide the scale de Lautour is seeking.
He would not comment on the rationale or the prospects for the merger talks.
WNZ has been operating for about a year after a $6 million capital-raising and the 700 shareholders have been told by the directors it could take a few years to achieve the full benefits of the company’s strategy.
“It will be hard and slow but we’ve made good progress and farmers are locking in contracts,” Shadbolt said.
It isn’t clear yet whether Merino wool farmers will be involved in the planned levy referendum. They already pay a fee to The NZ Merino Company to cover marketing costs.
NZ Merino managing director John Brackenridge said it was too early to comment on the issue.
