Autonomous association owned and managed democratically by its clients
Raunds Co-operative Society Limited was a consumer co-operative society based in Raunds, Northamptonshire, founded in 1891.
A consumers' co-operative is an enterprise owned by consumers and managed democratically and that aims at fulfilling the needs and aspirations of its members.[1] Such co-operatives operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit.[2] Many cooperatives, however, do have a degree of profit orientation. Just like other corporations, some cooperatives issue dividends to owners based on a share of total net profit or earnings (all owners typically receive the same amount); or based on a percentage of the total amount of purchases made by the owner. Regardless of whether they issue a dividend or not, most consumers’ cooperatives will offer owners discounts and preferential access to goods and services.
Consumers' cooperatives often take the form of retail outlets owned and operated by their consumers, such as food co-ops.[3] However, there are many types of consumers' cooperatives, operating in areas such as health care, insurance, housing, utilities and personal finance (including credit unions).
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 federations. 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.[4]
Consumer cooperation has been a focus of study in the field of cooperative economics.
History
Model of Robert Owen's visionary project for a cooperative settlement. Owenites fired bricks to build it, but construction never took place.
Consumer cooperatives rose to prominence during the industrial revolution as part of the labour movement. As employment moved to industrial areas and job sectors declined, workers began organizing and controlling businesses for themselves. Workers cooperatives were originally sparked by "critical reaction to industrial capitalism and the excesses of the industrial revolution." The formation of some workers cooperatives was meant to "cope with the evils of unbridled capitalism and the insecurities of wage labor."[5]
The first documented consumer cooperative was founded in 1769,[6] in a barely-furnished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society.
In the decades that followed, several cooperatives or cooperative societies formed including Lennoxtown Friendly Victualling Society, founded in 1812.[7]
The philosophy that underpinned the cooperative movement stemmed from such socialist writers as Robert Owen and Charles Fourier. Robert Owen, considered by many[weaselwords] as the father of the cooperative movement, made his fortune in the cotton trade, but believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the cotton mills of New Lanark, Scotland, where the first co-operative store was opened. Spurred on by this success, Owen had the idea of forming "villages of co-operation" where workers would drag themselves out of poverty by growing their own food, making their own clothes, and ultimately becoming self-governing. He tried to form such communities in Orbiston, Scotland and in New Harmony, Indiana in the United States of America, but both communities failed.
Similar early experiments were made in the early 19th century and by 1830 there were several hundred co-operatives.[8]William King made Owen's ideas more workable and practical. He believed in starting small, and realized that the working classes would need to set up co-operatives for themselves, so he saw his role as one of instruction. He founded a monthly periodical called The Co-operator,[9] the first edition of which appeared on 1 May 1828. It gave a mixture of co-operative philosophy and practical advice about running a shop using cooperative principles.
The first successful co-operative was the Rochdale Society of Equitable Pioneers, established in England in 1844. This became the basis for the development and growth of the modern cooperative movement.[10] As the mechanization of the Industrial Revolution forced more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford.
With lessons from prior failed attempts at co-operation in mind, they designed the now-famous Rochdale Principles, and over a period of four months they struggled to pool one pound sterling per person for a total of 28 pounds of capital. On December 21, 1844, they opened their store with a very meagre selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods.
The Co-operative Group formed gradually over 140 years from the merger of many independent retail societies, and their wholesale societies and federations. In 1863, twenty years after the Rochdale Pioneers opened their co-operative, the North of England Co-operative Society was launched by 300 individual co-ops across Yorkshire and Lancashire. By 1872, it had become known as the Co-operative Wholesale Society (CWS). Through the 20th century, smaller societies merged with CWS, such as the Scottish Co-operative Wholesale Society (1973) and the South Suburban Co-operative Society (1984).
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 directors 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.
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.[citation needed] In practice consumers' cooperatives price goods and services at competitive market rates.[citation needed]
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,[11] others argue that consumer cooperatives do not return a profit by traditional definition, and similar tax standards do not apply.[12]
Problems
Since consumer cooperatives are run democratically, they are subject to the same problems typical of democratic government.[citation needed] Such difficulties can be mitigated by frequently providing member/owners with reliable educational materials regarding current business conditions.[13] In addition, because a consumer cooperative is owned by the users of a good or service as opposed to the producers of that good or service, the same sorts of labor issues may arise between the workers and the cooperative as would appear in any other company. This is one critique of consumer cooperatives in favor of worker cooperatives.
Pursuit of social goals
January 1947 Co-op Magazine back cover designed as a promotional poster
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.
For example, 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:
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.[10]
Cooperative Federalists, a term coined in the writings of Beatrice Webb, advocated forming federations of consumer cooperatives as a means to achieve social reform. They believed such a development would bring benefits such as economic democracy and justice, transparency, greater product purity, and financial benefits for consumers.[14]
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%.[16]
In France, Coop Atlantique owns 7 hypermarkets, 39 supermarkets, and about 200 convenience stores.
In Germany, the ReWe Group is a diversified holding company of consumer cooperatives that includes thousands of retail stores, discount stores, and tourism agencies. It ranks as the second largest supermarket chain in Germany and in the top ten cooperative groups in the world.[17]
In Spain, Eroski is a supermarket chain within Mondragón Corporación Cooperativa. As a worker-consumer hybrid, some of the personnel are hired workers and some are owner-workers. The owners include workers and mere consumers, but buying is open to everybody. It has franchises under the brand Aliprox not owned by Eroski but sharing its product range. Its origin is in the Basque Country. In its process of expansion, it merged with the Valencia-based cooperative Consum, but the merger dissolved in 2005. It has expanded across Spain and entered France and Gibraltar. After the Spanish crisis of 2008, Eroski sold several of its supermarkets and hypermarkets.
The Wine Society (Australian Wine Consumers’ Co-operative Society Limited), established in 1946, now has more than 58,000 members. It sources and sells premium wines under the Society label, runs comprehensive wine education courses, and recognises excellence from young winemakers.
Bank Australia was formed in 2011 as the Members and Education Credit Union. It changed its name to Bank Australia in 2015. The bank is wholly owned by its customers, reported[who?] at 125,000 in 2012.
Japan
Japan has a large and well-developed consumer cooperative movement with more than 14 million members. Retail co-ops alone had a combined turnover of 2.5 trillion Yen (21 billion U.S. Dollars) in April, 2003.[19]Co-op Kobe (コープこうべ) in the Hyōgo Prefecture is the largest retail cooperative in Japan and, with more than 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 one in five of all Japanese households belongs to a local retail co-op and 90% of all co-op members are women.[20] Nearly six million households belong to one of the 1,788,000 Han groups.[19] 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 strength of Japanese consumer co-ops in recent years has been the growth of community supported agriculture in which fresh produce is sent direct to consumers from producers without going through the market.
Some of co-op organisations, for example, in Tokyo metropolis and Kanagawa prefecture, manage their local political parties from 1970's; generally names itself as the "Network Movement" ("Tokyo Seikatsusha (it means "Living Persons") Network",[21] "Kanagawa Network Movement",[22] and so on).[clarification needed] They depend on consumers movement, feminism, regionalism, and prefer to anti-nuclear.[clarification needed] These parties keep small but steady sections in prefecture and municipal assemblies.
All credit unions in the United States and Canada are financial cooperatives.[26]Tim Worstall has called the Vanguard Group a customer owned cooperative, since the owners of Vanguard funds are the funds' investors.[27]
↑ O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p.203. ISBN0-13-063085-3.{{cite book}}: CS1 maint: location (link)
↑ Adams, Frank and Gary Hansen (1993) Putting Democracy To Work: A Practical Guide for Starting and Managing Worker-Owned Businesses, Berrett-Koehler Publishers, Inc, San Francisco
A cooperative is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise". Cooperatives are democratically controlled by their members, with each member having one vote in electing the board of directors. Cooperatives may include:
The Mondragon Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain.
The Co-operative Group Limited, trading as Co-op and formerly known as the Co-operative Wholesale Society, is a British consumer co-operative with a group of retail businesses including grocery retail and wholesale, legal services, funerals and insurance retailing.
A worker cooperative is a cooperative owned and self-managed by its workers. This control may mean a firm where every worker-owner participates in decision-making in a democratic fashion, or it may refer to one in which management is elected by every worker-owner who each have one vote.
Co-operative Retail Services was the second-largest consumer co-operative society in the United Kingdom. In 2000, it was dissolved by its members, merging with the larger Co-operative Wholesale Society, to form the Co-operative Group (CWS) Ltd.
The United Kingdom is home to a widespread and diverse co-operative movement, with over 7,000 registered co-operatives owned by 17 million individual members and which contribute £34bn a year to the British economy. Modern co-operation started with the Rochdale Pioneers' shop in the northern English town of Rochdale in 1844, though the history of co-operation in Britain can be traced back to before 1800. The British co-operative movement is most commonly associated with The Co-operative brand which has been adopted by several large consumers' co-operative societies; however, there are many thousands of registered co-operative businesses operating in the UK. Alongside these consumers' co-operatives, there exist many prominent agricultural co-operatives (621), co-operative housing providers (619), health and social care cooperatives (111), cooperative schools (834), retail co-operatives, co-operatively run community energy projects, football supporters' trusts, credit unions, and worker-owned businesses.
United Co-operatives Limited, or simply United Co-op, was a regional consumer co-operative in the United Kingdom, until its merger with the Co-operative Group in 2007. The society operated across Yorkshire, the North West and North Midlands of United Kingdom. In September 2002, it came about from the merger of United NorWest and Yorkshire Co-operative Society.
A food cooperative or food co-op is a food distribution outlet organized as a cooperative, rather than a private or public company. Food cooperatives are usually consumer cooperatives, where the decisions regarding the production and distribution of its food are chosen by its members. Like all cooperatives, food cooperatives are often based on the 7 Rochdale Principles, and they typically offer natural foods. Decisions about how to run a cooperative are not made by outside shareholders, therefore cooperatives often exhibit a higher degree of social responsibility than their corporate analogues.
Coop, COOP, or Co-op most often refers to:
Cooperative economics is a field of economics that incorporates cooperative studies and political economy toward the study and management of cooperatives.
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 Lambert, and Beatrice Webb.
The history of the cooperative movement concerns the origins and history of cooperatives across the world. 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 organization.
The O., short for "the Organization", also known as the C.O. or Coop Organization, was a Black-led radical political cadre organization that grew out of the Twin Cities New Left movement in the 1970s. It was established in 1974 by Theophilus Smith, a former staff member of Student Nonviolent Coordinating Committee
Federal Retail and Trading Services (FRTS) is the central buying group for co-operative retail societies in the United Kingdom. It came into its current structure in 2015, though its predecessor was established in 1993, and it supplies almost all food bought for sale by the over 4,000 co-operative foodstores in the UK. The buying group is owned and controlled by each of its member societies but is managed by The Co-operative Group on their behalf. It operates by pooling the collective £8.5bn buying power for 18 co-operative societies in the UK, allowing them to negotiate better prices from suppliers, so as to compete effectively with other UK supermarket chains.
Co-op Food is a brand used for the food retail business of The Co-operative Group in the United Kingdom.
Unicorn Grocery is a co-operative grocery store located in Chorlton-cum-Hardy, Manchester, England. As a workers co-op, it is controlled democratically by its members/owners, who run the business with a flat management structure and with an equal rate of pay. Ethics form the foundations of the business, and Unicorn's Principles of Purpose are the framework within which the business operates.
The Co-operative, also known as Co-op, is a brand used by a variety of co-operatives based in the United Kingdom. It is not a single business, but a number of different consumers' co-operatives spanning various sectors.
The Oberlin Student Cooperative Association (OSCA) is a non-profit corporation founded in 1962 that feeds and houses Oberlin College students. Located in the town of Oberlin, Ohio, it is independent from but closely tied to Oberlin College. OSCA is one of the largest student housing cooperatives in North America, though membership has declined in recent years.
The Minnesota Food Cooperative Wars took place in 1975-1976 time period and revolved around the many food cooperatives in the Twin Cities region of Minnesota. Initially, the disputes and confrontations within the Twin Cities Cooperative movement were not referred to as "Wars", but the nomenclature developed in part as a result of the title of a documentary made decades later.
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