READ the letter from the Italian processors to AWI.

Dear Chairman

We have just finished the 10th Milano Unica, a major Italian textiles trade fair showcasing top-end Italian and European fabrics, and without a doubt the most important exhibition in the world for fabrics, including our own, made with the finest Australian wool.

We are satisfied at having registered both a constant number of customer-visitors and clear signs of a turnabout and re-awakening of the market, even though the situation still remains critical.

For wool, we feel there are some interesting opportunities and we would be making a mistake if we didn’t resume our marketing efforts and seize the opportunities the market is offering.  There is no time to lose!

We think that AWI has both a mission and the necessary resources to develop effective marketing initiatives to reposition wool in the market using modern and pro-active techniques to capture the interests of consumers and particularly younger ones.

We have seen and discussed with Fabrizio Servente a summary of concepts for developing an Operational Marketing Plan.  We believe that what he presented to the AWI board is in line with market needs and opportunities but it is now essential to proceed to "concrete proposals."

The Italian wool industry is willing to cooperate in the development of action to help Wool regain the position it deserves in the market, but only under a carefully considered and fully share roject.

This said, we feel we must express our disappointment about the recent visit to Biella of three members of your Board of Directors: Mr Laurence Modiano, Mr Charles Olsson and Mrs Meredith Sheil.

The reasons for our disappointment are as follows:

• We felt that the delegation didn’t express official AWI thinking.
• We were asked the same questions to which we have already answered many times in the past
• We were very embarrassed and disappointed at seeing people involved in clear conflicts of interest.
• We were surprised and upset by the lack of knowledge and extreme insensitivity to the Mulesing issue, which is still seriously affecting our relationship with the market.
• We have heard from the press about a proposed advertising campaign supported by Mr Modiano that he presented in Asia as well as in other European countries.  Nothing was said on this subject in the meeting in Biella; we were not asked for our opinion.  We found that particularly strange.

Frankly speaking, we did not understand the real purpose of their visit and we are very concerned about the developments it might have.

We would not like to witness the development of initiatives involving wool (a fiber we have done a lot to position in the highest segments of the market) promoted in ways which we have not been able to assess, let alone approve, and which we believe are not in line with what the market requires.

We therefore reiterate our willingness to speak with a united and unequivocal AWI board.

We also reiterate a recommendation we made at the Biella meeting: that of urgently setting up a marketing committee composed of experienced professionals from the European fashion business – including Fabrizio Servente, who has long experience in this field and already operates as your consultant.  The Committee would work with advertising agencies and as soon as possible, present a ``series of proposal’’ (not just one unilateral proposal!), including us.  In this way, all concerned will be in a position to decide how best to proceed with the available resources.

As mentioned earlier, the Italian part of the industry would consider economically participating with AWI in marketing initiatives, provided they are designed, managed and shared in a serious and professional way and can be applied consistently over a number or years.

We hope, in the best interest of our wonderful fiber, to be able to work with you in the near future and look forward to new proposals as soon as possible.

Best regards,

Alessandro Barberis Canonico – Vitale Barberis Canonico

Alfredo Botto Poala – Zegna Baruffa Lane Borgeosesia

Francesco Botto Poala – Reda

Paolo Botto Poala – Gruppo Botto

Rodolfo Botto Poala – Gruppo Botto

Luciano Donatelli – Unione Industriale Biellese

Pier Luigi Loro Piana – Loro Piana

Sergio Tamborini – Marzotto

Paolo Zegna – Ermenegildo Zegna Group