The manufacturer has developed next-to-skin Merino garments for the active outdoor market but its market push has all but stopped in the key European market.

"Unfortunately being proudly Australian has really worked against us," Driza-Bone Activ CEO Rod Williams said.

"As soon as this mulesing issue really hit the retail sector things just stopped, we are really getting thumped on this one as we have been placed in the too-hard basket."

Sales in Europe have been just 20pc of what Mr Williams expected, with retailers canceling orders due to Australian Merino being on the nose due to mulesing.

"It's all too hard for retailers right now and having pushed the Australian aspect to our business we are very easy targets," he said.

"The easiest thing for me to do would be to say I use New Zealand wool which I will never do."

Australian Wool Innovation has assisted Driza-Bone Activ in its push into the market, however the brand is now asking for more financial support given their plight.

"AWI has been very supportive and generous but in our greatest time of need we are unable to gain their further support," Mr Williams said.

AWI general manager of apparel product development and marketing, Pascal Senkoff said AWI started working with Driza-Bone two years ago and has, and will continue to, support the iconic Australian brand, which is committed to using more Merino wool in its apparel collections.

"AWI has provided a very significant amount of financial and in-kind resources in the last two years to assist the development and marketing of the product," Mr Senkoff said.

"This includes product development, supply chain assistance, marketing collateral and assistance with trade shows and exhibitions.

"AWI will also assist Drizabone in the supply chain for non-mulesed wool, for which the market place for this type of wool is now operating as evident from the recent special sale and the wool on offer from Australian woolgrowers."