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The wool acquisition controversy

McCarthy, Owen
Discussion Paper
Fields of Research
The most controversial topic in the wool industry over the last 5-10 years has been marketing reform, in particular the question of wool acquisition. Briefly, acquisition means the setting up by legislation of an authority to acquire compulsorily and market all New Zealand wool. Although there are many interpretations of precisely what functions the authority would undertake, the key proposal is that it assumes ownership of the wool at an early stage in the marketing process. Similar marketing reform schemes for wool have been under scrutiny in South Africa and Australia. However, in both these countries the agony seems over and action has been approved by the majority of those involved in the industry. This paper is mainly concerned with outlining the cases for and against acquisition. The first section provides background on the structure and organization of the wool industry in New Zealand and traces the recent progress of wool marketing and reform. The second section briefly describes the world textile market of which wool forms a relatively small part, examines the competitive position of wool in this market and outlines an ideal marketing system for wool within such a context. The third section describes and comments on various wool market reform proposals and puts the case for non-acquisition, that is, the status quo, with minor variations.