Co-operatives: An Overview

Martin MeteyardCo-operative Consultant (Scotland)

martin.m@pop3.poptel.org.uk

1www.nrn.ie

Co-operatives: An Overview

• Tried and tested business model going back more than 200 years

• Over 800m co-op members worldwide• Co-ops provide more than 100m jobs• Aggregate turnover of top 300 co-ops in world

= 1.1 trillion USD• Business model based on TRUST

Co-operatives: An Overview

Co-operatives operate according to seven principles as agreed by the International Co-operative Alliance (ICA)

• Voluntary and Open Membership• Democratic Member Control• Member Economic Participation• Autonomy and Independence• Education, Training and Information• Co-operation among Co-operatives• Concern for Community

Co-operatives: An Overview

“Co-operatives are a means to provide goods and services which members need and which they cannot obtain individually at similarly favourable conditions, or at all.” (Prof. Hans-H. Munkner)

Co-operatives: An Overview

Case study 1: The Co-operative Group (UK)• Established 1863 as Co-op Wholesale Society• Dominant food supplier up till WW2• Almost continuous decline till early 1990s• Decline halted with greater emphasis on

membership and values – ethical positioning• Strong support for rural retailing• Now largest consumer co-op in world – Somerfield

takeover & Britannia BS merger

Co-operatives: An Overview

Case study 2: Mondragon (Basque country, Spain)• Catholic priest set up technical school 1943• First industrial co-operative with 24 workers 1956• Caja Laboral bank established 1959• Retail co-ops form Eroski chain 1969• Importance of multi-stakeholder model• Role of members’ capital• Now 90,000+ employees worldwide• ‘Green jobs’ initiative in USA with USW trade union

Co-operatives: An OverviewCase study 3: Amul (India)• First dairy co-op union in Gujarat formed 1946• Indigenous R&D and technology development• Success led to formation of other dairy co-ops• Apex co-op formed 1973: Gujarat Co-operative Milk

Marketing Federation• Now jointly owned by 2.8m milk producers via more

than 13,000 village dairy co-ops• Largest food brand in India, turnover of 1.5 bn USD• Strong consumer branding, now export to 37

countries

Co-operatives: An Overview

Other co-op success stories:• US rural electricity co-ops – 930 co-ops with

40 million consumer members covering 75% of land mass in 46 states

• Renewable energy: Denmark and Scotland• Co-operative banks and credit unions• Agricultural co-ops

Co-operatives: An OverviewCo-ops can also unite producers and consumers

• Oklahoma Food Co-op started November 2003

• Only sells food and non-food products made in Oklahoma

• Membership open to producers & consumers

• Co-op charges each 10% to finance operating costs

• Now more than 2,000 members, with 3,800 items offered every month, and $1m annual sales

Co-operatives: An Overview

Other examples:• Farmers’ markets – notably Dublin Food

Co-op!• Fairtrade system, based on consumers

supporting producers – UK sales in 2008 rose 43% to more than £700m

• Can UK and Irish agricultural co-ops (e.g. milk producers) learn from this?

Co-operatives: An Overview

In the wake of the financial crisis, people are looking more than ever for business models that embody accountability and trust.

An opportunity that co-operatives should seize!

Thank you.

Co-operatives: An Overview

Some useful websites:

International Co-operative Alliance www.ica.coopThe Co-operative Group www.co-operative.coopMondragon Co-operative Corporation www.mondragon-corporation.comGujarat Co-operative Milk Marketing Federation www.amul.comNational Rural Electric Co-operative Association www.nreca.orgEnergy4All www.energy4all.co.ukOklahoma Food Co-op www.oklahomafood.coopDublin Food Co-op www.dublinfood.coopUK Fairtrade Foundation www.fairtrade.org.uk