THE future looks bleak for ultrafine wool produced under housed or shedded conditions.
Not only has the price for the shedded fibre failed to cover production costs over the past two or three years, but the notion of housing sheep isn't something now supported by the Ermenegildo Zegna Group, one of the world's major users and beneficiaries of the finest, softest and cleanest of Merino wools.
Animal welfare concerns were paramount, said group chairman Paola Zegna, in Melbourne last week for the group's annual awards for superfine and ultrafine wool production.
While Australia's output of ultrafine 16.5-micron wool accounts for about 1.6 per cent of the total clip, housed ultrafine is down to less than 25 tonnes, with many producers opting to close down their sheds.
The awards, which this year included 750gm gold coin to Ed and Jill Hundy from Walcha, in NSW for their 10.6-micron fleece, are no doubt appreciated by the winners and, according to Mr Zegna, are designed to encourage production of the elite fibre.
That may be right, but most of the specialist producers would argue that the best encouragement is a sustainable and profitable market price.
"It is too big a word to say this market is in trouble," Mr Zegna said. "I know growers are complaining there is not enough price difference."
"My answer to them and Australian Wool Innovation is that specialty wools have to have a very special promotion," Mr Zegna said.
He said the group, which retails in 80 countries through more than 560 company and franchised stores, had recorded growth last year, despite the economic woes in Europe.
He said China was now their best market, although the US remained their biggest volume market.
While high-quality men's suits, which retail from $2500-$4500, have long been the hallmark of the company, Mr Zegna said its apparel market was now equally divided between formal and casual wear.
He said the group was the No.1 Woolmark licensee under the former International Wool Secretariat.
But despite 47 years with a continual licence, none of their garments carried a Woolmark label.
"Our brand is a little more ahead of the Woolmark," Mr Zegna said.
So why hold a Woolmark licence?
"It's to encourage wool promotions," he said.