AWI: can’t promote yourself in a tin shed at Dubbo

AWI Chair Walter Merriman made the controversial statement when appearing before Senate estimates hearings in Canberra today alongside AWI CEO Stuart McCullough, with the government’s decentralisation agenda a hot topic.

Mr McCullough also told the hearing AWI wouldn’t be making a submission to a new Senate inquiry underway into decentralisation, recently established to examine the controversial policy issue.

Headlining that inquiry will be the Australian Pesticides and Veterinary Medicines Authority being shifted from Canberra to Armidale in the New England electorate of Agriculture and Water Resources Minister Barnaby Joyce.

Mr Merriman also indicated difficulty in being able to meet with Mr Joyce personally, as part of AWI’s ongoing statutory obligations in receiving government funding to bolster levy-payer funded activities.

The wool producer from Merryville Merino Stud at Boorowa in NSW said he was approached about eight or nine months ago by the minister and discussed potentially relocating AWI out of its Sydney office into a rural area.

Mr Merriman said his advice to Mr Joyce was that AWI shareholders had voted for a 60-40 split in the way the agency spends its money; 60 per cent on marketing and 40pc on research.

“We don’t think that if we move to Bourke or somewhere we can conduct our marketing activities as well as we can in Sydney,” he said.

“I cannot tell you whether he accepted that (advice) or not - I think he understood that part of our business.”

Mr Merriman said AWI was based in Sydney due to it being a “historical” position dating back to when the company first formed and in his opinion, that location also reflected the company’s marketing direction.

“You just cannot promote yourself in a tin shed at Dubbo or somewhere else,” he said.

But Assistant Agriculture and Water Resources Minister and SA Liberal Senator Anne Ruston hit back saying “I’m not sure that Dubbo would consider itself a remote area”.

Mr Merriman said “I’m not talking about that”.

He said he was talking about when Italian brands like Loro Piana and Zalia Mak, at the “very pinnacle of fashion” are taken to a tin shed at Boorowa, where he lives, or any other locations like that, “it just doesn’t gel”.

Mr Merriman said all of the art and fashion people were located in Sydney.

He said apart from that one discussion with Mr Joyce, there had not been any further talks on the decentralisation proposal, to his knowledge.

But the AWI Chair said he’d only met with minister three times in the last four years; despite meetings with department staff.

“He’s been very busy over the Christmas period I know that because I’ve been two months trying to meet him,” he said.

Mr Merriman said AWI met with department every six months which was deemed as a meeting with the minister and had to meet with the minister twice a year, as per its statutory charter.

He said the last meeting he had was at Mr Joyce’s Armidale office a month ago but said he would need to get “clarity” on whether it was with electoral or ministerial staff.

Mr McCullough said AWI had been asked to make a submission into the Senate decentralisation inquiry but would not be making one.

He said AWI would argue that its current Sydney location was a “historical thing” and 80 people were working from that office which had a seven year lease.

If the benefit cost analysis work was done it would show the loss in terms of human resources of moving to a remote area, and in particular a “quite profound” loss of AWI’s digital and publishing marketing staff, he said.

Mr McCullough said AWI had an on-farm research department in Sydney and post-farm research department in Hong Kong due to a recent structural change, in wanting to get closer to manufacturing partners in Asia.

He said AWI also had remote staff based around Australia at places like Wagga, Deniliquin, Hamilton and Orange which put them closer to their research and that also helped to lower costs.

Mr McCullough said the monthly cost of operating AWI’s Sydney office was reduced by 35pc after recently changing from a class A to class B building and moving to a better, central location.

Asked if he believed the Sydney location gave AWI a strategic advantage the AWI CEO replied “absolutely”.

Overall, Mr Merriman said the Australian wool industry was in “very good shape” following an important price rise of 22.5pc in the US market over the last 12 months which was, “the main trading currency for our wool industry” and in the face of a 5.5pc increase in supply.

He said the wool market was now “trading at record levels - so things are good in our industry” while the mutton price had also increased 15pc.