Brokers threaten mutiny over 'high' AWEX fees

30 Aug, 2000 03:03 PM

SIMMERING dissatisfaction with increased AWEX charges has come to a boil, with a number of WA brokers vowing to operate outside the wool selling system if the charges are not lowered. AWEX had initially lifted the auction service fees for this season from $1.11 last year to $1.81 a lot, but lowered it to $1.50 in June after opposition to the hike in costs. However that concession is not enough for some brokers, who say that at the very most, the rise in costs should match CPI increases ‹ which by their estimation means no more than about $1.17/lot. Two WA brokers have formally approached the AWEX board to lower the charges further, and say they will pull out of the co-operative wool selling system if AWEX refuses to budge. One of the lobbyists, Wool Agency managing director Scott Shenton, said not only were the charges unreasonable, but they would be passed back to woolgrower clients. "This season, growers face a 21 per cent increase in wool sale costs, and that's if all they do is just sell," Mr Shenton said. "Where the industry has to contend with decreasing volume, the peak body has failed to address the situation ‹ rather than contract its costs, it's gone the other way." Mr Shenton said it would not be difficult to sell wool outside the system, as the brokers had run the auctions before AWEX was formed. "Competition may be the solution if AWEX, as a monopoly, believes it can charge whatever it likes," he said. Primaries of WA principal Des Sheedy also opposed the charge increases, describing them as exorbitant. "If anything, with more modern technology available, there is an opportunity to reduce costs, and there should be minimal charge increases or none at all," he said. "Before the AWEX system, the charges were 23-24 cents a bale." Mr Sheedy is also unhappy at a re-offer charge introduced by AWEX, which levies brokers and growers for bales that get put up again after being passed in. "That to me is a form of double-dipping," he said. Wesfarmers Dalgety WA wool manager Ron Myers said he had been surprised by the size of the rise introduced by AWEX. "We are unhappy, but negotiations are continuing," he said. The AWEX move has also rankled the WA Farmers Federation, with Wool Section president Tony Gooch angry that the decision was made without industry consultation. Echoing the concerns of brokers, Mr Gooch said the new fee structure would result in increased costs being passed back to growers. AWEX had defended the charges by claiming they were necessary as a result of the switch to a user-pays system for all services, as recommended by the Australian Competition and Consumer Commission review. AWEX chief executive David White had said this meant each centre needed full cost recovery, and that the Fremantle site ‹ which was expensive to run because of its prime real estate position ‹ would no longer be subsidised by the Sydney and Melbourne selling rooms. A decision on whether the board will drop the charges is expected sometime this week. As Farm Weekly went to press, no announcement had been made. ÿ


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