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A consumers' cooperative is a Cooperative business owned by its customers for their Mutual Benefit . It is a form of Free Enterprise that is oriented toward service rather than pecuniary profit. The customers or consumers of the goods and/or services the business provides are often also the individuals who have provided the capital required to launch or purchase that enterprise. There are many types of consumers' cooperative. There are health care, insurance, and Housing Cooperative s as well as Credit Union s, Agricultural and Utility Cooperative s. 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. The difference is that where a for-profit enterprise will treat the difference between cost (including labor, etc.) and selling price as financial gain, the consumer owned enterprise returns this sum to the consumer/owner as an over-payment. 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 . Consumers' cooperatives may, in turn, form Co-operative Federation s. These may come in the form of Co-operative Wholesale Societies , through which Consumers' Co-operatives collectively purchase goods at wholesale prices and, in some cases, own factories. Alternatively, they may be members of Co-operative Union s. GOVERNANCE Consumers' cooperatives utilize the cooperative principle of Democratic Member Control , or one member/one vote. Most consumers' 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 fiscal 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 consumers' 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. ROLE OF GOVERNMENT There is no unusual government role needed in a consumer owned and operated business and practically considered there is less requirement for government involvement than there is with a business established to maximize monetary gain for its owners. This is because there is no incentive for a consumer-owned company to misrepresent the quality or value of what it offers for sale to its owner customers, so there is little utility or need in having inspectors who work for a government policing this form of business. However there is a need to oversee the actions of the board of directors. In Minnesota statute 308a governs cooperatives there is no government organization to turn to when the board of directors ignores state statute. The Wedge Co-op of Minneapolis is an example of this. Statute 308a gives the member/owners the legal right to nominate candidates for the board of directors. Unfortunately Sarah Wovcha of the board of directors and H.R. Manager Sara Zaag decide whom may receive a nomination. During the 2006 annual meeting hundreds of votes were not counted, the votes were not counted because the candidate John Palmer was not approved by the board of directors. As the consumer ultimately provides the capital for all business enterprise it is unfortunate that the consumer ownership form of endeavor is not better understood and utilized. There is no reason why most large enterprises could not thrive if they were owned and operated as consumers' cooperatives rather than businesses designed to provide financial gain for stock holders who may have no personal involvement in the enterprise beyond monetary profit. For example Time reported in an article - The Farmer Takes a Town , Monday, Dec. 25, 1944:
In the United States detractors of consumer owned business have often tried to imply that consumers' cooperative businesses are subsidized by government allowed tax breaks but this is actually a dispute about whether surplus payment returns to consumer/owner patrons are considered as being the same as dividends payed to corporate stock holders. As the Time article quoted from above states, the National Tax Equality Association (NTEA) launched a protracted campaign to convince the United States government to enact laws that would be unfavorable to consumer owned business. PROBLEMS OF CONSUMERS' COOPERATION Because consumers' cooperatives are run democratically they are subject to some of the same problems experienced by democratic government: the selection of incompetent or dishonest management, poor business planning, deficit spending, etc. Consumers may prefer to vote with their feet than to do detailed superisory work of an organisation they do not work for, for example at The Equitable Life Assurance Society in the UK. Problems such as these can generally be avoided by providing member/owners with educational materials that inform often and honestly as regard to business conditions. A helpful study of practices that are detrimental to a consumer owned business is provided by ''Problems of Cooperation'' , by James Peter Warbasse. A HISTORICAL ACCOUNT OF CONSUMERS' COOPERATION SOCIAL GOALS Consumers' co-operation has been a focus of study in the field of Co-operative Economics . The Co-operative Federalist school, in particular, has advocated such organisational forms. CONSUMERS' CO-OPERATIVES IN DIFFERENT COUNTRIES Australia
Europe In the United Kingdom , 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 co-operative societies, providing a common branding and logo. In Scandinavia , the national cooperations of Norway , Sweden and Denmark joined as Coop Norden A/S 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%. Japan Japan has a very large and well developed consumer co-operative 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 exchange rates as of 11/15/2005 ) in 2003/4.Japanese Consumers' Co-operative Union., 2003 In Japan , 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. North America In the 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. NOTES SEE ALSO FURTHER READING
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