Wool scouring operator Cavalier Wool Holdings says the need to rationalise New Zealand's remaining scouring operations is greater than ever, before they're lost to off-shore competition.
Cavalier says it will proceed with plans to buy the assets of the rival scourer and trader, New Zealand Wool Services International (WSI), after a High Court judgement in its favour.
The court has dismissed an appeal against a Commerce Commission decision allowing Cavalier to create a wool scouring monopoly by acquiring WSI's assets.
Cavalier Wool Holding's chief executive Nigel Hales says it's essential to the survival of the New Zealand scouring industry, in the face of a falling wool supply and more wool being exported unwashed to China where scouring is cheaper.
He says the success of past rationalisation can be seen in the fact that the price of wool scouring was 36 cents per kilogram in 1986, but it's now 26 cents per kg.
Mr Hales says rationalisation has allowed New Zealand to remain competitive and reduce its tariffs and if that had not happened then New Zealand would now be like Australia, which has all of its wool clip scoured in China.
Mr Hales says merging the WSI and Cavalier scours in Hawke's Bay and Canterbury would also increase the processing capacity.
Godfrey Hirst says scouring monopoly could increase charges
Carpet manufacturer Godfrey Hirst, which lodged the High Court appeal against the Commerce Commission decision, has the opposite view.
It says a scouring monopoly could increase charges, and force it to move more of its operations off shore.
General Manager Tania Pauling sees that process as a threat to the wider wool industry.
She says the Commerce Commission is saying that scouring in China is a competitive restraint on New Zealand, so they're effectively saying wool should be sent to China for scouring.
But Ms Pauling says it's not viable to send New Zealand wool to China to scour, instead companies would buy Chinese wool and if Chinese wool was used the yarn would be made in China.
She says downstream industries would be put at risk and purchases of New Zealand wool would decrease.
Ms Pauling says Godfrey Hirst will need to study the High Court judgement before deciding whether to make any further challenge.
Wool Services International says it hasn't seen a Cavalier offer for its assets yet and any bid would have to be approved by its share-holders.
