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22nd May 2008, Sydney

Mulesing - A statement from Australian Wool Innovation

The AWI Board has today sent an open letter to international retailers and wool industry stakeholders. This AWI communiqué again confirms that there is full support for Australian woolgrowers in their challenge to produce an ethical natural fibre that meets the commitments made to international retailers.

AWI Chairman, Brian van Rooyen says retailers are comfortable with the industry’s progress. “There will be alternatives to mulesing ready for adoption prior to 2010 and they provide very significant animal welfare benefits. Progress is being made on other alternatives such as breeding and selection. Already 23% of Australian wool producing properties do not intend to mules in 2008. In the interim, pain relief is being widely used and promoted.

“International retailers urge us to continue our work. “They well-appreciate that woolgrowers are mindful of adapting their production systems and that a non-mulesed wool market will be operating through the Australian auction system from July 2008 with support from AWEX. “The retailers also know that 32% of lambs born this year will not be mulesed.”

Mr van Rooyen also stated that a letter received from the animal rights activist group PETA has been received, and a reply has been sent. “We’ve informed PETA that the resolve of AWI is clear and the industry’s commitment is rock-solid. We will continue our work and deliver to the timeframes agreed with our customers.

“We believe that we are meeting all of our commitments and we will continue to do so.”

All AWI Directors have pledged that AWI will continue to vigorously research alternatives to surgical mulesing in support of the industry’s commitment to the surgical phasing out of mulesing by 31 December 2010, and fully endorse the use of pain relief in the interim.

An open letter from AWI Chairman

Australia prides itself on operating to world’s best practice in animal husbandry and welfare. The Australian wool industry cares for its sheep, and this is critical to the long term success of our industry.

This is underpinned by the Australian Government through the Australian Animal Welfare Strategy and the national codes of practice for the welfare of animals. Additionally, the principles and practices of Corporate Social Responsibility are actively upheld throughout the supply chain from the farm to the customer.

To deliver on the wool industry’s commitment to phasing out the practice of mulesing, AWI continues to invest in research programs on behalf of the industry which cover breeding and selection, genomics and a suite of other technologies which are in various stages of adoption.

AWI has spent nearly $A14 million in alternatives to mulesing and associated animal welfare programs and is forecast to spend a further $A10.09 million over the next three years. We are investing $A15 million in sheep genomics, $A10.5 million in breeding, selection and genomic research and other sheep development programs through the CRC for Sheep Industry Innovation. A further $A3 million is being invested in applied genetics over the next three years.

Importantly, there is no one solution for all woolgrowers and each grower must identify those options that best suit their environment. This is actively underway, as evidenced by the results of the Department of Agriculture Western Australia Survey which show that:

· 32% of Australian lambs will not be mulesed in 2008.

· 23% of Australian properties do not intend to mules in 2008.

· 11.5% of the wool clip will be from non-mulesed animals.

· 14.8% of woolgrowers are actively seeking sheep with genetic characteristics for bare breech.

There is now a rapidly developing market in Australia for non-mulesed wool and a special sale of this wool will be conducted soon. Moreover, a certification system to identify mulesed and non-mulesed wool is being developed and supported by the Australian Wool Exchange.

Accordingly, we believe the progress made by woolgrowers and the whole wool industry is exceptional and meets the obligation we have made to international retailers. We will not compromise our ongoing progress and the risk of an increased number of sheep being exposed to the pain and suffering associated with flystrike.

All AWI Directors have pledged that AWI will continue to vigorously research alternatives to surgical mulesing in support of the industry’s commitment to the phasing out of surgical mulesing by 31 December 2010 and fully endorses the use of pain relief in the interim.

Your continued support for Australian Merino wool is valued and we remain committed to building market opportunities together.

Yours Sincerely

Brian van Rooyen

Chairman

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