Consumers' cooperative
Encyclopedia
Consumer cooperatives are enterprises
owned by consumers and managed democratically
which aim at fulfilling the needs and aspirations of their members. They operate within the market system
, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit. Consumers' cooperatives often take the form of retail outlets owned and operated by their consumers, such as food co-ops. However, there are many types of consumers' cooperatives, operating in areas such as health care, insurance, housing
, utilities
and personal finance (including credit union
s).
In some countries, consumers' cooperatives are known as cooperative retail societies or retail co-ops, though they should not be confused with retailers' cooperatives, whose members are retailers rather than consumers.
Consumers' cooperatives may, in turn, form cooperative federation
s. These may come in the form of cooperative wholesale societies
, through which consumers' cooperatives collectively purchase goods at wholesale prices and, in some cases, own factories. Alternatively, they may be members of cooperative unions.
Consumer cooperation has been a focus of study in the field of cooperative economics.
elected by and from the membership. The board is usually responsible for hiring management and ensuring that the cooperative meets its goals, both financial and otherwise. Democratic functions, such as petitioning or recall of board members, may be codified in the bylaws or organizing document of the cooperative. Most consumer cooperatives hold regular membership meetings (often once a year). As mutually owned businesses, each member of a society has a shareholding equal to the sum they paid in when they joined.
Large consumers' co-ops are run much like any other business and require workers, managers, clerks, products, and customers to keep the doors open and the business running. In smaller businesses the consumer/owners are often workers as well. Consumers' cooperatives can differ greatly in start up and also in how the co-op is run but to be true to the consumers' cooperative form of business the enterprise should follow the Rochdale Principles
.
The major difference between consumers' cooperatives and other forms of business is that the purpose of a consumers' cooperative association is to provide quality goods and services at the lowest cost to the consumer/owners rather than to sell goods and services at the highest price above cost that the consumer is willing to pay. In practice consumers' cooperatives price goods and services at competitive market rates.
Where a for-profit enterprise will treat the difference between cost (including labor etc.) and selling price as financial gain for investors, the consumer owned enterprise may retain this to accumulate capital in common ownership, distribute it to meet the consumer's social objectives, or refund this sum to the consumer/owner as an over-payment. (Accumulated capital may be held as reserves, or invested in growth as working capital or the purchase of capital assets such as plant and buildings.)
While some claim that surplus payment returns to consumer/owner patrons should be taxed the same as dividends paid to corporate stock holders, others argue that consumer cooperatives do not return a profit by traditional definition, and similar tax standards do not apply.
Thus, the founding document of the Rochdale Pioneers
, who established one of the earliest consumer cooperatives in England in 1844, expressed a vision that went far beyond the simple shop with which they began:
Cooperative Federalists
, a term coined in the writings of Beatrice Webb
, were advocates for the formation of federations of consumer cooperatives as means of achieving social reform. They anticipated such a development as bringing a broad set of benefits including economic democracy and justice
, transparency
, greater product purity, and financial benefits for consumers.
The Neo-Capitalist economic doctrine seeks to transfer the provision of almost all government provided public good
s and the conversion of any large privately owned monopolies
into consumer cooperatives.
, the nationwide Co-operative Group, formerly the Co-operative Wholesale Society
(or "CWS"), owns many of its own supermarkets, as well as supplying goods wholesale to the majority of British cooperative societies, providing a common branding and logo.
In Scandinavia
, the national cooperations of Norway
, Sweden and Denmark joined as Coop Norden
in January 2002.
In Italy
the Coop Italia chain formed by many sub-cooperatives controlled 17.7% of the grocery market in 2005.
In Finland
the S Group
is owned by 22 regional cooperatives and 19 local cooperative stores, which in turn are owned by their customers. In 2005 the S Group overtook its nearest rival Kesko Oyj
with a 36% share of retail grocery sales compared to Kesko’s 28%.
In France
Coop Atlantique own 7 hypermarkets 39 supermarkets and about 200 conveniences store.
, Co-op Kobe
(コープこうべ) in the Hyōgo Prefecture
is the largest retail cooperative in Japan and, with over 1.2 million members, is one of the largest cooperatives in the world. In addition to retail co-ops there are medical, housing and insurance co-ops alongside institutional (workplace based) co-ops, co-ops for school teachers and university based co-ops.
Approximately 1 in 5 of all Japanese households belongs to a local retail co-op and 90% of all co-op members are women. (Takamura, 1995). Nearly 6 million households belong to one of the 1,788,000 Han groups (Japanese Consumers' Co-operative Union., 2003). These consist of a group of five to ten members in a neighbourhood who place a combined weekly order which is then delivered by truck the following week. A particular strength of Japanese consumer co-ops in recent years has been the growth of community supported agriculture where fresh produce is sent direct to consumers from producers without going through the market.
, the PCC (Puget Consumers Cooperative) Natural Markets
in Seattle is the largest consumer-owned food cooperative. The National Cooperative Grocers Association
maintains a food cooperative directory.
Seattle-based R.E.I.
, which specializes in outdoor sporting equipment, is the largest consumer cooperative in the United States.
Similarly, outdoor retailer Mountain Equipment Co-op
in Canada, is one of the country's major consumer cooperatives.
In the Canadian Prairie provinces, gas stations, lumberyards, and grocery stores can be under the coop brand.
All credit union
s in the United States and Canada are financial cooperatives.
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
owned by consumers and managed democratically
Democracy
Democracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...
which aim at fulfilling the needs and aspirations of their members. They operate within the market system
Market economy
A market economy is an economy in which the prices of goods and services are determined in a free price system. This is often contrasted with a state-directed or planned economy. Market economies can range from hypothetically pure laissez-faire variants to an assortment of real-world mixed...
, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit. Consumers' cooperatives often take the form of retail outlets owned and operated by their consumers, such as food co-ops. However, there are many types of consumers' cooperatives, operating in areas such as health care, insurance, housing
Housing cooperative
A housing cooperative is a legal entity—usually a corporation—that owns real estate, consisting of one or more residential buildings. Each shareholder in the legal entity is granted the right to occupy one housing unit, sometimes subject to an occupancy agreement, which is similar to a lease. ...
, utilities
Utility cooperative
A utility cooperative is a type of cooperative that is tasked with the delivery of a public utility such as electricity, water or telecommunications to its members...
and personal finance (including credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
s).
In some countries, consumers' cooperatives are known as cooperative retail societies or retail co-ops, though they should not be confused with retailers' cooperatives, whose members are retailers rather than consumers.
Consumers' cooperatives may, in turn, form cooperative federation
Cooperative federation
A co-operative federation or secondary co-operative is a co-operative in which all members are, in turn, co-operatives.Historically, co-operative federations have predominantly come in the form of co-operative wholesale societies and co-operative unions...
s. These may come in the form of cooperative wholesale societies
Co-operative wholesale society
A Co-operative Wholesale Society, or CWS, is a form of Co-operative Federation , in this case, the members are usually Consumers' Co-operatives...
, through which consumers' cooperatives collectively purchase goods at wholesale prices and, in some cases, own factories. Alternatively, they may be members of cooperative unions.
Consumer cooperation has been a focus of study in the field of cooperative economics.
Governance and Operation
Consumer cooperatives utilize the cooperative principle of Democratic member control, or one member/one vote. Most consumer cooperatives have a board of directorsBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
elected by and from the membership. The board is usually responsible for hiring management and ensuring that the cooperative meets its goals, both financial and otherwise. Democratic functions, such as petitioning or recall of board members, may be codified in the bylaws or organizing document of the cooperative. Most consumer cooperatives hold regular membership meetings (often once a year). As mutually owned businesses, each member of a society has a shareholding equal to the sum they paid in when they joined.
Large consumers' co-ops are run much like any other business and require workers, managers, clerks, products, and customers to keep the doors open and the business running. In smaller businesses the consumer/owners are often workers as well. Consumers' cooperatives can differ greatly in start up and also in how the co-op is run but to be true to the consumers' cooperative form of business the enterprise should follow the Rochdale Principles
Rochdale Principles
The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844, and have formed the basis for the principles on which co-operatives around the world operate to this day. The...
.
Finance and approach to capital accumulation
The customers or consumers of the goods and/or services the cooperative provides are often also the individuals who have provided the capital required to launch or purchase that enterprise.The major difference between consumers' cooperatives and other forms of business is that the purpose of a consumers' cooperative association is to provide quality goods and services at the lowest cost to the consumer/owners rather than to sell goods and services at the highest price above cost that the consumer is willing to pay. In practice consumers' cooperatives price goods and services at competitive market rates.
Where a for-profit enterprise will treat the difference between cost (including labor etc.) and selling price as financial gain for investors, the consumer owned enterprise may retain this to accumulate capital in common ownership, distribute it to meet the consumer's social objectives, or refund this sum to the consumer/owner as an over-payment. (Accumulated capital may be held as reserves, or invested in growth as working capital or the purchase of capital assets such as plant and buildings.)
While some claim that surplus payment returns to consumer/owner patrons should be taxed the same as dividends paid to corporate stock holders, others argue that consumer cooperatives do not return a profit by traditional definition, and similar tax standards do not apply.
Problems
Since consumer cooperatives are run democratically, they are subject to the same problems typical of democratic government. Such difficulties can be mitigated by frequently providing member/owners with reliable educational materials regarding current business conditions.Pursuit of social goals through consumer co-operatives
Many advocates of the formation of consumer cooperatives - from a variety of political perspectives - have seen them as integral to the achievement of wider social goals.Thus, the founding document of the Rochdale Pioneers
Rochdale Pioneers
The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement....
, who established one of the earliest consumer cooperatives in England in 1844, expressed a vision that went far beyond the simple shop with which they began:
- "That as soon as practicable, this society shall proceed to arrange the powers of production, distribution, education, and government, or in other words to establish a selfsupporting home-colony of united interests, or assist other societies in establishing such colonies."
Cooperative Federalists
Co-operative Federalism
Cooperative federalism is a school of thought in the field of cooperative economics. Historically, its proponents have included J.T.W. Mitchell, Charles Gide, Paul Lambart, and Beatrice Webb...
, a term coined in the writings of Beatrice Webb
Beatrice Webb
Martha Beatrice Webb, Lady Passfield was an English sociologist, economist, socialist and social reformer. Although her husband became Baron Passfield in 1929, she refused to be known as Lady Passfield...
, were advocates for the formation of federations of consumer cooperatives as means of achieving social reform. They anticipated such a development as bringing a broad set of benefits including economic democracy and justice
Social justice
Social justice generally refers to the idea of creating a society or institution that is based on the principles of equality and solidarity, that understands and values human rights, and that recognizes the dignity of every human being. The term and modern concept of "social justice" was coined by...
, transparency
Transparency (market)
In economics, a market is transparent if much is known by many about:* What products, services or capital assets are available.* What price.* Where....
, greater product purity, and financial benefits for consumers.
The Neo-Capitalist economic doctrine seeks to transfer the provision of almost all government provided public good
Public good
In economics, a public good is a good that is non-rival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good...
s and the conversion of any large privately owned monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
into consumer cooperatives.
Australia
- University Co-operative Bookshop Ltd, Australia's largest consumer cooperative, established by students in 1958, has grown to become the largest provider of educational, professional and lifelong learning resources in Australia. With over 40 branches across Australia, a comprehensive website and presence on the internet since even before the web, numerous additional services and over 1.3 million lifetime members, the Co-op is more than just a bookshop.
- The Wine Society (Australian Wine Consumers’ Co-operative Society Limited), established in 1946, now has over 58,000 members. Also sources and sells premium wines under the Society label, runs comprehensive wine education courses and recognises excellence from young winemakers.
Europe
In the United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, the nationwide Co-operative Group, formerly the Co-operative Wholesale Society
Co-operative wholesale society
A Co-operative Wholesale Society, or CWS, is a form of Co-operative Federation , in this case, the members are usually Consumers' Co-operatives...
(or "CWS"), owns many of its own supermarkets, as well as supplying goods wholesale to the majority of British cooperative societies, providing a common branding and logo.
In Scandinavia
Scandinavia
Scandinavia is a cultural, historical and ethno-linguistic region in northern Europe that includes the three kingdoms of Denmark, Norway and Sweden, characterized by their common ethno-cultural heritage and language. Modern Norway and Sweden proper are situated on the Scandinavian Peninsula,...
, the national cooperations of Norway
Coop NKL
Coop NKL BA is a Norwegian cooperative retailing company. Coop NKL is owned by 177 local cooperative associations in Norway and has more than one million members and who actually operate that stores. The company has its headquarters in Oslo...
, Sweden and Denmark joined as Coop Norden
Coop Norden
Coop Norden is a joint Scandinavian holding company, formerly a retail chain. It is owned by three major cooperative retail companies; Danish FDB , Swedish KF , and Norwegian Coop NKL . As a retailer Coop Norden operated around 1,000 stores and had a yearly turnover of approximately SEK 90 billion...
in January 2002.
In Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
the Coop Italia chain formed by many sub-cooperatives controlled 17.7% of the grocery market in 2005.
In Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
the S Group
S-Group
The S Group is a Finnish retailing cooperative organisation, founded in 1904. It consists of 22 regional cooperatives operating all around Finland in the markets for groceries, consumer durables, service station, hotel and restaurant services, agricultural supplies, and car sales...
is owned by 22 regional cooperatives and 19 local cooperative stores, which in turn are owned by their customers. In 2005 the S Group overtook its nearest rival Kesko Oyj
Kesko
Kesko is a Finnish retailing conglomerate. It is engaged in the food trade, the home and specialty goods trade, the building and home improvement trade, and the car and machinery trade...
with a 36% share of retail grocery sales compared to Kesko’s 28%.
In France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
Coop Atlantique own 7 hypermarkets 39 supermarkets and about 200 conveniences store.
Japan
Japan has a very large and well-developed consumer cooperative movement with over 14 million members; retail co-ops alone had a combined turnover of 2.519 trillion Yen (21.184 billion U.S. Dollars [market exchange rates as of 11/15/2005]) in 2003/4. In JapanJapan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, Co-op Kobe
Co-op Kobe
Co-op Kobe , officially known as Consumer Co-operative Kobe, is a Kobe, Japan-based consumers' cooperative. Founded in 1921, it is the largest retail cooperative in Japan and, with over 1.2 million members, is one of the largest cooperatives in the world....
(コープこうべ) in the Hyōgo Prefecture
Hyogo Prefecture
is a prefecture of Japan located in the Kansai region on Honshū island. The capital is Kobe.The prefecture's name was previously alternately spelled as Hiogo.- History :...
is the largest retail cooperative in Japan and, with over 1.2 million members, is one of the largest cooperatives in the world. In addition to retail co-ops there are medical, housing and insurance co-ops alongside institutional (workplace based) co-ops, co-ops for school teachers and university based co-ops.
Approximately 1 in 5 of all Japanese households belongs to a local retail co-op and 90% of all co-op members are women. (Takamura, 1995). Nearly 6 million households belong to one of the 1,788,000 Han groups (Japanese Consumers' Co-operative Union., 2003). These consist of a group of five to ten members in a neighbourhood who place a combined weekly order which is then delivered by truck the following week. A particular strength of Japanese consumer co-ops in recent years has been the growth of community supported agriculture where fresh produce is sent direct to consumers from producers without going through the market.
North America
In the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the PCC (Puget Consumers Cooperative) Natural Markets
PCC Natural Markets
PCC Natural Markets is a food cooperative based in Seattle, Washington. With over 45,000 members, it is the largest consumer-owned food cooperative in the United States.. Both members and non-members may shop at the retail locations, but members receive certain discounts. The organization...
in Seattle is the largest consumer-owned food cooperative. The National Cooperative Grocers Association
National Cooperative Grocers Association
The National Cooperative Grocers Association is a marketing service cooperative of cooperative grocery stores founded in 1999 in the United States. NCGA's membership includes 114 independent food cooperatives operating more than 145 stores in 32 states with combined annual sales of nearly $1.2...
maintains a food cooperative directory.
Seattle-based R.E.I.
R.E.I.
REI is a privately held American retail corporation organized as a consumers' cooperative, selling outdoor recreation gear, sporting goods, and clothes via some 110 retail stores in about 30 states, catalogs, and the Internet. The company opens four to six new stores each year...
, which specializes in outdoor sporting equipment, is the largest consumer cooperative in the United States.
Similarly, outdoor retailer Mountain Equipment Co-op
Mountain Equipment Co-op
Mountain Equipment Co-op is a Canadian consumers' cooperative, which sells outdoor recreation gear and clothing to its members exclusively. MEC is notable for its commitment to environmental protection and other causes. As a co-op, MEC sells only to customers who hold a lifetime membership, which...
in Canada, is one of the country's major consumer cooperatives.
In the Canadian Prairie provinces, gas stations, lumberyards, and grocery stores can be under the coop brand.
All credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
s in the United States and Canada are financial cooperatives.
See also
- CooperativeCooperativeA cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
- Food coop
- National Cooperative Business AssociationNational Cooperative Business AssociationFounded in 1916 as the Cooperative League of America, the National Cooperative Business Association is a United States membership organization for cooperatives, businesses that are jointly-owned and democratically-controlled....
- Neo-CapitalismNeo-CapitalismNeo-Capitalism, literally means "New Capitalism". This economic theory fuses some elements of capitalism. The new capitalism was new compared to the capitalism in the era before World War II....
- Worker cooperativeWorker cooperativeA worker cooperative is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making in a democratic fashion, or it may refer to one in which...
- Health food storeHealth food storeA health food store is a type of grocery store that primarily sells health food, organic foods, local produce, and often nutritional supplements...
- History of the cooperative movementHistory of the cooperative movementThe history of the cooperative movement concerns the origins and history of cooperatives. Although cooperative arrangements, such as mutual insurance, and principles of cooperation existed long before, the cooperative movement began with the application of cooperative principles to business...
- Credit unionCredit unionA credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
- Healthcare Co-operatives movement in India
Further reading
- Consumers' Co-operative Societies, by Charles GideCharles GideCharles Gide was a leading French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France.- Academic work :...
, 1922 - Co-operation 1921-1947, published monthly by The Co-operative League of America
- The History of Co-operation, by George Jacob Holyoake, 1908
- Cooperative Peace, by James Peter WarbasseJames Peter WarbasseDr. James Peter Warbasse was an American surgeon and advocate for cooperatives. He founded the Cooperative League of the United States of America and was its president from 1916 to 1941.-Early life:Warbasse was born on November 22, 1866 in Newton, New Jersey to Joseph Warbasse and...
, 1950 - Problems Of Cooperation, by James Peter Warbasse, 1941
- Why Co-ops? What Are They? How Do They Work? A pamphlet from the G.I. Roundtable series by Joseph G. Knapp, 1944
- Law of Cooperatives, by Legal Firm Stoel Rives, Seattle
External links
- Cooperatives Europe – The common platform of ICA Europe and the CCACE
- International Co-operative Alliance
- Consumer Cooperatives Worldwide (sector of ICA)
- Co-operatives UK, the central organisation for all UK co-operative enterprises
- The online database of UK Co-operatives
- ICOS, the Irish Co-operative Organisation Society
- The ICA Group, technical advice for cooperative start-ups in the USA.
- English website from the Japanese Consumer Co-operative Union.
- A new approach to cooperative understanding
- University of Wisconsin Center for Cooperatives
- Coopnet Update paper and event database
- Dissecting Healthcare Co-op
- Bachground Paper on Co-operatives