OPPOSITION leader Bill Shorten has downplayed suggestions about potential brand damage to local producers following revelations Australian wool was switched from high grade to low grade product on bales sold into China
Mr Shorten faced the media today as news broke of an alleged wool tampering racket that’s been operating since May but is now under investigation by Victoria Police.
The issue involves about 18 bales of wool reportedly valued at about $3000 each that were substituted for inferior product understood to be valued ten-times lower than the original items with the switch discovered by Chinese wool buyers.
Asked if the scandal could be more widespread or if it impacted the Australian brand of wool, adding to the argument wool should be processed locally then sold to China, Mr Shorten said “That's a great question considering we are at Victoria Wool Processors”.
“Some of these potential crimes of swapping wool bales between here and China and putting in lower-quality wool wouldn't happen if we had a manufacturing industry in Australia,” he told assembled media.
“Now you've got three processors left in Australia - there used to be 20 and 30.
“The odds of (quality control) improving always increase when we value-add to our wool in Australia and don't leave it to other parts of the world.”
But Mr Shorten denied the issue may have an impact on the quality brand of Australian wool.
“I think Australian wool is world class, so no I don't,” he said to media questions.
“But what I do think is the case is that when this country does more value-add manufacturing here, this country benefits and we keep greater control over the brand and the quality of Australian product.
“The fact that we grow so much of the world's wool but we send it in raw form overseas, it gets processed overseas and then we buy it back at much greater cost, is remarkable.
“When you look at the cost of a jumper; you know someone might buy $100 woollen jumper which is produced overseas, yet the wool component of it is in, you know, in single digits here.
“What we are effectively doing is growing the wool and then paying the rest of the world, to buy back our wool at much higher prices.
“That's why I believe and Labor believes in strong manufacturing in Australia and policies which back it in.”
Assistant Trade and Investment Minister Keith Pitt said there were reports of an active police investigation into the wool-swapping allegations which meant he wouldn’t be making detailed comment.
But he said Australia’s reputation for producing high quality farm products like wool was what drove higher prices and returns to farmers “and it has to absolutely be protected”.
“And the worst thing that could happen for manufacturing in this country is having Bill Shorten as the Prime Minister,” he said.
“You can only look to see what’s happening in South Australia if you want to know what will happen to the cost of manufacturing, under a Labor government.
“In terms of manufacturing, we’re a high wage country, but if we want to be competitive we need affordable energy.”
NSW Nationals Senator John “Wacka” Williams said the issue was damaging to the nation’s wool export reputation.
“If someone is cheating the system in Australia and exporting an inferior product when they bought a good product, then that is very damaging to our reputation as an exporter of wool – if it is happening,” the former wool shearer said.
“I hope the people are caught and face severe punishment for their act of fraud.
“Put yourself in the buyers’ position - if you go and buy a new car and then found out the clock (speedometer) had been wound back 100,000kms and it’s not new at all, you’d be pretty annoyed.”
WoolProducers Australia issued a statement saying it was disappointed to learn of the recent discovery of wool substitution in a transaction with China.
WoolProducers CEO Jo Hall said Australian woolgrowers produced the best quality Merino wool in the world “but incidents like these are damaging to the integrity of our industry”.
In 2016/17, Australia exported 254 million kilograms of wool to China, representing 79.3 per cent of the Australian wool clip, with a value of $2.4 billion, WoolProducers said.
“‘China is clearly our dominant trade partner and we simply cannot afford to erode any trust or confidence with them, which is why any case of wool substitution is so concerning,” she said.
“The Australian wool industry has robust processes in place to ensure the quality and integrity of the product to our trade partners.
“Whilst this incident is completely unacceptable, the fact that it has been uncovered demonstrates that the integrity systems in place for the quality assurance of Australian wool do work.
“As this is an active police investigation very little can be said on this specific incident, however WoolProducers are of the firm belief that anybody caught substituting Australian wool has no place in our industry.
“Substitution of Australian wool jeopardises the excellent reputation that Australian woolgrowers and the wider industry have strived to achieve.”
The story Shorten: local manufacturing industry stops wool swapping crimes first appeared on Farm Online.