Craig Smith, general manager of Devold Wool Direct, the buying arm of the company, said the contract went against the current wool contract system, in which growers were paid a fluctuating rate depending on the market average.
He described the move as a natural evolution.
"To produce the very best garments we need the very best wool, so naturally the sentiment must be reflected in what we pay our growers. We are the first in the industry to place such value on our supply chain but I hope we won't be the last,” Mr Smith said.
“By increasing the current contract price and fixing it for one year to start with, we are giving certainty in an ever-changing world, showing loyalty to our growers — as they do to Devold — is providing opportunity for reinvestment back into the land, which ultimately benefits us through the quality of wool produced,” he said.
Under the new contract, growers would receive a fixed price per kilogram, (higher than the market average) for one year. Devold would also offer a bonus payment of $2 per kg above the new contracted base rate should the wool meet a certain criteria.
Devold chief executive Cathrine Strange said the company would be looking to fix this contract for a further four years (five in total) once the uncertainty in Ukraine has levelled. Once a five-year contract was concluded it would push the value of the new contract over $40million.
Stew Perriam, who co-owns and operates Bendigo Station, says the new contract has reaffirmed an already strong relationship with the brand. “One of the big positives of the contract is that it rewards us as growers, it gives us certainty as we move forward,” Mr Perriam said.
Devold, which recently opened its flagship New Zealand store in Wanaka, operates a vertical model where every step of the process — from the wool, to the yarn, to the final finished garment — is entirely managed and controlled by Devold.
“What we are trying to do is redefine how clothes are made from the ground up, ” Mr Smith said.
