A local farmer will benefit from a new arrangement between wool garment company Devold and its growers.

Going against industry norms, Devold will pay its New Zealand growers a fixed premium price per kilogram, which would add $9M to the New Zealand wool industry.

Devold, a major Norwegian clothing brand created in 1853, has just one New Zealand store, located in Wānaka.

Bendigo Station supplies wool to Devold and co-owner and operator Stew Perriam said the contract was unique.

“One of the big positives of the contract is that it rewards us as growers,” Stew said. “It gives us certainty as we move forward.”

The status quo in the current wool contract systems sees growers paid a fluctuating rate based on the market average.

However Devold growers will receive a fixed premium as well as a bonus payment of two dollars per kilogram above the new rate should the wool meet certain criteria. 

“To produce the very best garments we need the very best wool so… the sentiment must be reflected in what we pay our growers,” Devold Wool Direct (the company’s buying arm) general manager Craig Smith said.

“We are the first in the industry to place such value on our supply chain but I hope we won't be the last.”

Stew said premium merino growers strive to be right at the top.

“Having this contract in place gives us the confidence to produce the very best wool we can,” he said.

Devold CEO Catherine Strange said the company will be looking to fix this contract for a further four years (five in total) once the situation in Ukraine has stablised. 

Once a five-year contract was concluded it would push the value of the new contract over $40 million, she said.

“We remain confident in the Devold brand’s strong market position and continued growth,” she said. “Our growers are very important to us and we will do our utmost to ensure their contribution is valued.”

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