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Icebreaker signs landmark deal with New Zealand merino wool growers

New Zealand-based outdoor brand Icebreaker, which was recently acquired by VF Corporation, has announced it has signed a 10-year supply contract with growers of New Zealand merino wool.

Local media is reporting that it is the longest ever contract of this type and that it could be worth as much as NZ$100 million ($69 million) across the 10 years.

The agreement with New Zealand wool growers has been agreed in collaboration with national wool marketing group The New Zealand Merino Company.

It is designed to ensure Icebreaker has a long-term supply of the fibre, as well as allowing it to enhance its brand by providing consumers with a traceable link back to local growers.

The New Zealand sheep farmers will benefit from the deal by gaining secure long-term orders and avoiding potentially volatile material prices. Icebreaker has agreed to pay premium to market prices in recognition of long-term grower loyalty. 

Greg Smith, CEO of Icebreaker, said: “As far as we are aware, this is the first agreement of its kind, not only for New Zealand’s fibre industry but globally as well.  Based on current volumes, over the duration of the contract, this represents NZ$100 million investment, the value of which goes directly to our New Zealand growers.”

Apparel and footwear group VF announced plans to acquire the brand at the start of November. The transaction is expected to be complete early in 2018.

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