SYDNEY — So much for a cease-fire.

This story first appeared in the March 25, 2008 issue of WWD. Subscribe Today.

The Australian wool industry’s four-year battle with the animal rights lobby over the farming practice of mulesing is threatening to unravel into a full-blown crisis in Europe, which accounts for some 12 percent of the industry’s export sales of 3 billion Australian dollars, or $2.7 billion at current exchange.

Since early February, 19 Swedish retailers have joined a People for the Ethical Treatment of Animals-organized boycott of Australian mulesed wool; approximately 40 other European retailers have stated their intention to join; the Norwegian government is seeking to impose a ban on mulesed wool, and Sweden’s Minister for Agriculture has unveiled plans to push for a full-scale European Union ban on mulesed wool at the European Commission.

Mulesing is the surgical removal of pieces of skin around the tail of a sheep to prevent “flystrike,” or flys laying eggs in the area leading to infestation.

Last week PETA representatives protested outside the Australian Embassy in Stockholm for the abolition of mulesing and will stage similar protests in Norway, Finland and Denmark over the coming week.

Following calls for a public inquiry into bribery allegations against Australian wool industry representatives made by a recent Swedish current affairs program, demands for Australian Wool Innovation chairman Ian McLaughlin to resign, deepening divisions within the various wool bodies and the industry at large accused of having underestimated the rising global tide of ethical consumerism, some have warned the Australian industry could be facing “catastrophe” unless it takes appropriate action immediately.

According to Pat Barry, an Australian buyer for French wool-broking house Chargeurs, more than 70 percent of orders from Europe are now insisting on wool from nonmulesed sheep. Along with Laurence Modiano, the London-based director of the second-largest buyer of Australian wool, G. Modiano, who has reported the cancellation of 10 weeks of Australian sales, Barry has called on the Australian government for an immediate mandate on the use of compulsory pain relief for sheep.

Last week, federal Minister for Agriculture Tony Burke said the government would not make pain relief compulsory.

“The matter is serious as some European retailers have stated that they will not sell garments in their stores — C&A amongst others — made of wool which comes from sheep that have been mulesed,” International Wool Textile Organization president Gunther Beier told WWD. “However, if pain relief medication is used during mulesing as an interim until a better practice has been developed and in some form legislated, we believe the retailers will lift their ban.”

The European crisis comes just eight months after AWI agreed to withdraw a federal court case against PETA over its wool boycott, which had ensnared a number of retailers, notably Abercrombie & Fitch, and which AWI claimed breached the secondary boycott provisions of the Trade Practices Act 1974.

In exchange for dropping the case, PETA agreed to a temporary suspension worldwide of its retailer-focussed wool boycott activities until Dec. 31, 2010 — the date by which the Australian wool industry had already pledged to phase out surgical mulesing. PETA was, however, obliged to maintain the moratorium only beyond Dec. 31, 2007, provided the wool industry met several criteria.

Following October’s AWI board election meeting — in which several candidates called for the 2010 mulesing deadline to be either scrapped or renegotiated until a real alternative is found, but subsequently recanted — PETA contacted international retailers to say the industry had “reneged” on the agreement.

A fortnight ago, PETA head Ingrid Newkirk wrote to Australian Prime Minister Kevin Rudd calling for an immediate ban on mulesing.

According to Don Hamblin, the chair of the Wool and Sheep Industry Taskforce Operations Group, an immediate halt to mulesing would pose “massive animal welfare problems” due to flystrike. Approximately 11.5 percent of the Australian clip already comes from unmulesed sheep, said Hamblin, with a recent survey produced by the West Australian Department of Agriculture reporting that 32 percent of all lambs born in Australia this year will remain unmulesed.

The industry remains committed to the 2010 surgical mulesing phaseout deadline, said Hamblin.

“We’re helping the industry move to a nonmulesed sheep population,” said Hamblin, whose organization has also lent its support to pain relief. “The Australian wool industry is sticking to its 2010 timetable. We’re demonstrating that some farmers are already increasing the amount of unmulesed wool to the market and have adapted their management practices. This is all about the Australian industry responding to retailers. It has nothing to do with answering to animal rights groups or animal activists. The Australian wool industry is committed to our retailers. They’re our gateway to get our products to our customers and that’s what we’re focused on.”

Sweden’s Hennes & Mauritz was one of the retailers recently targeted by PETA. On Feb. 6, the company said it would cease buying mulesed merino wool (according to Hamblin, H&M purchases up to 0.5 percent of the Australian wool clip annually). According to an H&M statement, “The company feels that the phaseout of the practice is proceeding too slowly.