Merino wool is not usually itchy, in fact it's used for base layers/thermals next to your skin. Possibly getting confused with other types /breeds of wool.
Having said that, it does look suspiciously cheap and it's a good point about the ethics of merino production. And then the risk of shrinking/pilling which again, good quality merino knitwear shouldn't be susceptible to, but it looks fuzzy even in the photo.
I was "burnt" last winter buying a jumper from Jigsaw, £90 or so, 60% Wool, 35% Polyamide, 5% Cashmere. Started going bobbly after an hours wear. What a waste when they could have used a higher wool content and left out the cashmere.