AN amalgamation of the Australian Wool Exchange (AWEX) and Australian Wool Testing Authority (AWTA) is back on the table.
The plan has been benched multiple times in the past decade due to the lack of industry support.
The final report of the Wool Selling System Review (WSSR) panel released last week reignited the discussion after recommending the two organisations merged to form a single Australian wool standards and technical body.
The review, commissioned by Australian Wool Innovation (AWI), recommended the industry “reactivate the process to try to achieve a merge of these two bodies”, given the decline in the national wool clip and the complimentary services they provide.
The consolidation of bodies was addressed in respective submissions made to the WSSR panel by AWEX and AWTA, which highlighted two failed attempts to unify the bodies in 2006 and 2007.
In 2006 AWEX initiated discussions with AWTA to ask it to consider increased cooperation to identify synergies which could reduce cost to industry.
After preliminary discussions, AWEX initially terminated those discussions, before reopening them a year later.
AWTA’s 2007 proposal to integrate AWEX’s operational activities was knocked back because of a lack of support from AWEX members.
In their first submission to the WSSR issues paper last February, AWTA revealed that if the 2007 amalgamation went ahead “… it may have provided the industry a significant reduction in the costs of overheads, the ability to easily integrate activities, and a broader based platform for potential industry based innovation”.
AWEX chief executive Mark Graves said the feedback from members in 2006/2007 about the potential merger “was not what they wanted”.
“I’d suggest the market has changed but the membership hasn’t in terms of its structure or composition,” Mr Graves said.
Submissions in favour of the merge included Private Treaty Wool Merchants of Australia, Australian Council of Wool Exporters and Processors, National Council of Wool Selling Brokers of Australia and WA Farmers who believed there would be cost savings from the merge.
AWEX and AWTA plan to discuss the report’s recommendations in their respective board meetings later this month.
The WSSR report’s main recommendation remains the Wool Exchange Portal (WEP) which is estimated to be from $900,000 to $1.75million to establish.
The WEP is a proposed online selling system that would provide growers with brokers’ services and charges, list of selling options, electronic selling platforms and live streaming of open cry auctions.
The panel proposed a steering committee consisting of industry stakeholders, AWI, AWTA and AWEX.
The direct cost of the selling system for a shorn wool clip, worth about $2.5billion in 2014/2015, was estimated to be under $300m, or about 12 per cent of the wool at $144.6 per bale.
The report concluded that the climate of inertia within the industry and resistance to change was missing opportunities for better returns to growers.