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Norwegian subsidies could impact British wool market

AN allegedly unfair and outdated wool marketing system in Norway could ultimately result in long-term damage to the British wool market, a group of eight of the nine buyers currently active in the British Wool Marketing Board (BWMB) auctions claimed. 

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Norwegian subsidies could impact British wool market

In an open letter, the group maintained a government subsidy paid to wool growers in Norway – between approximately 180p and 477p sterling equivalent per greasy kg – effectively meant the dominant Norwegian buyer could acquire large volumes of wool cheaply, paying the farmers about 27p/kg for the most common grade of wool.

 

The nub of the issue, the group said, was that the dominant Norwegian buyer Norilia, wholly owned by the agricultural co-operative Nortura, is the parent company of Curtis Wool Direct (CWD), the one firm not a signatory to the letter.

 

The group said CWD now bought more than half the wool at the BWMB auctions.

 

“That CWD’s parent company enjoys such an arrangement in Norway is disconcerting but, if the benefit of such cheap wool is then passed on to the UK’s largest buyer of British wool, which also owns one of the UK’s two remaining wool scouring facilities, in our opinion this may lead to significant problems."


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The group acknowledged various reasons why the British wool trade had concentrated over the years but said it was concerned that if the situation in Norway did not change it would be even harder for other UK merchants and processors to compete against CWD/Norilia, possibly resulting in fewer buyers of UK wool and even less competition.

 

“It is time for the UK farming and wool industry to appeal to the Norwegian industry and Ministry of Agriculture to overhaul their current wool-selling system which we perceive to be contrary to the principles of open and fair trade.”

 

CWD maintained the group’s claim was ’wholly unfounded in its implied conclusions’, and contained factual inaccuracies.

A spokesman said it had already treated the buyers’ concerns seriously and handled them in good faith, with the chairman travelling from Norway to meet them and discuss the issues.

 

He added: “One thing we do all agree on is the importance of the UK auction system, of which CWD is a strong supporter."

 

A BWMB spokesman said it could not comment as it did not know the full details.

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