What types of co-operatives are there in Australia?
Practically any type of business can be operated by a co-operative. In Australia, around 1,700 cooperatives are active in a very diverse range of sectors, including agriculture, arts, child care, health care, clubs, community services, education, energy, finance, hardware, housing, radio broadcasting, fishing, manufacturing, produce marketing, recycling, respite care, retail, superannuation funds, communications, transport, wholesale, and wine sales.
Co-operatives are always transforming, with some co-operatives beginning as agricultural co-operatives and becoming retail co-operatives. There are also new types forming such as platform co-operatives, which are co-operative internet-based platforms that, unlike Facebook and Twitter, are member-owned and member-governed.
It is generally said that there are four categories of Australian co-operatives:
- Consumer co-operatives, which buy and sell goods to members at competitive prices in a variety of sectors.
- Producer co-operatives, which may process, brand, market and distribute members’ goods and services, or supply goods and services needed by their members, or operate businesses which provide employment to members.
- Service co-operatives, which provide a variety of essential services to their members and communities.
- Financial co-operatives, including co-operative banks, credit unions, building societies and friendly societies, which provide investment, loan and insurance services to their members.
There are many retail co-operatives operating in Australia owned by the members, who are also the consumers of the goods sold.
A co-operative store also provides goods to its community. Often when a community is not well serviced, or when an existing retail shop faces closure, the community will come together to establish a co-op or retain the threatened store as a co-op.
Retail co-operatives vary in size from small purchasing groups to large supermarkets and department stores.
Some of the sectors in which they operate are:
- Newsagents and bookstores
- Hardware, building and rural supplies
- Department stores
- Electrical goods
- Plant nurseries
- Art galleries and craft outlets
There are few co-operative supermarkets remaining in Australia today, and in all cases they exist in country areas. In larger regional areas, they struggle to survive competition from newly established chain supermarkets. Retail co-operatives are disadvantaged by the stronger buying power and resources of the chain supermarkets, but often manage to survive due to member loyalty, adaptability and superior service.
ORGANIC FOOD – BLUE MOUNTAINS FOOD CO-OP
The Blue Mountains Food Co-op is not-for-profit, and community-owned and managed. It began when a small group of local people joined together to purchase and share quality organic food at affordable prices.
Operating in 1981 out of a member’s garage as a wholefoods buying group, food was freighted to the train station at Katoomba and picked up by members on a roster system. Originally there were around 20 households involved, opening the co-op only on Saturday mornings. After about 18 months the group amalgamated with another buying group from Wentworth Falls, and soon the opening hours included Thursdays as well.
As time passed, more tools of the trade were slowly accumulated, including big bins with lids, better scales and a (troublesome) food grinder. In 1986 the co-op rented its first premises in Megalong Street with a very supportive landlord charging a small rent and accepting modifications. At this time the co-op hired its first paid worker and opening times expanded to include Tuesdays. The business was still very much dependent on volunteers and word of mouth.
In 1997 the business officially became a co-operative and in 1998 moved to the current premises in Ha’Penny Lane. The co-op has come a long way since these early days, but the directions and visions of this initial buying group still influence who they are and what they do. There are currently more than 2,000 members, 26 paid staff and an annual turnover of $3.6 million.
NORTHERN CO-OPERATIVE MEAT COMPANY
Established in 1933 on the far north coast of New South Wales, NCMC is a farmer-owned industry-leading co-operative livestock processor producing beef, veal, pork, and other related products and services.
With annual revenue now in excess of $300 million, NCMC is one of NSW’s largest co-operatives.
Wholesale co-operatives have been formed by plumbers, the automotive industry and others to obtain supplies at lower prices through the power of group buying. Other services may be available to members, including finance, insurance, training and travel. Other types of wholesale cooperatives include agricultural, grocery, liquor, seafood, travel agents, furniture, hairdressing, toys and newsagents.
Producer co-operatives may provide a number of services to their members, including processing, branding, marketing or distributing their members’ products. They may also supply products or services to their members which are inputs for the members’ businesses.
The co-operative is the key market for the members’ products, and is owned by the members who sell or buy its products and services.
Producer co-operatives operate in agriculture, arts and crafts, the taxi industry, government procurement and fishing.
Agricultural marketing co-operatives are formed by members to process, package, brand, distribute and market farm products.
Agricultural supply co-operatives provide members with supply and storage of inputs for agricultural production, including fertilisers, seeds, fuel, and ploughing or harvesting services. As a member of an agricultural co-operative, a farmer can take advantage of volume discounts.
Both types of agricultural co-operatives seek to maximise the benefits to their farmer members. They are formed where farmers can access markets, services and products more costeffectively and efficiently collectively rather than individually. An important consideration for farmers in joining a co-operative is that their membership gives them equal ownership of the co-operative, providing them with control of its activities.
Employee-owned co-operatives are formed to provide members with employment by owning a business. The members are both the owners and the employees, and are dedicated to ensuring the co-operative is successful, as the co-operative provides both their jobs and working conditions.
Often employee-owned co-operatives are formed when a business owner wishes to retire or hand the business over to someone else and does not have family members in a position to take over business operations. An option is for the business to be taken over by a co-operative comprising its employees, customers or suppliers, rather than strangers. The business will then be more likely to remain within the community.
Employee-owned co-operatives allow employees to define working conditions, salaries and benefits, and share in surpluses in proportion to salary earned or hours worked. An employee can only be dismissed by the board because, of course, the employee is also a member. Employee-owned co-operatives operate in several business sectors, including arts and entertainment, clothing, construction, education, forestry, food, communications and marketing, manufacturing, home care and nursing.
Service co-operatives provide services to their owner-members, whether they are individuals, co-operatives or corporations. Services offered include housing, health care, child care, roadside assistance, electricity, natural gas and wind energy, water supply, community recreation facilities, tourism, community and social services, funeral services, transportation and communication.
People living in co-operative housing reside in private houses or units but use shared facilities, which may include kitchens, common dining areas, laundries and recreational areas. Members often also share activities, which may include cooking, eating, gardening and child care.
Housing co-operatives are often established to meet the needs and visions of certain groups of people such as people from low income households, people of a specific ethnic or religious background, artists, people with disabilities, or environmentally conscientious groups.
There are several types of co-operative housing, often called “intentional” housing, including:
- Cohousing, where member residents own their home under separate title but share in community activities.
- Communes, where members buy a share of the co-operative, which owns the land. Members share the property and resources.
- Eco-villages, where members live in individual homes, and share the objective to protect and improve the environment. In many cases eco-villages encourage self-sustainability and may have eco-businesses, such as organic produce.
- Housing co-operatives, which exist in both urban and rural areas. Members have an equal share in all households, with the right to occupy their own unit or house. Housing cooperatives are often leasehold.
In all types of co-operative housing, members commit to co-operation, providing housing, financial and social benefits. Members participate in the day-to-day decision making, and perform landlord and administrative roles. Membership requires active participation and involvement.
While there are instances of dissatisfaction, generally members develop a sense of pride and belonging, help their neighbours, and are supported by a close community of people with shared values. Co-operative housing addresses many issues arising from Australia’s housing crisis, including affordability, environmental impact and a stronger sense of neighbourhood.
Health care co-operatives are often formed in areas which are poorly served by existing service models and collectively offer a range of services, including GP medical clinics, bulk billing, dental surgeries, allied health services, retirement villages, nursing homes, hostels, bush nursing centres, home-based maternity services, community-based aged care and mental health services, health promotion, health insurance products, pre-paid health care packages, rehabilitation, and private hospitals.
They operate differently from traditional public and private sector health care services in that they are usually owned by health consumers. Health co-operatives usually have five core features: they are consumer-focused, consumer-governed, community-based, not-for-profit and any profits are reinvested in the development of services.
Child care co-operatives are community-based not-for-profit services, owned and managed by the parents of children attending the child care centre. Families are encouraged to participate and the centres’ philosophies usually emphasise high quality child care.
Financial co-operatives (co-operative/mutual banks, credit unions, building societies and friendly societies) provide financial, investment or loan services to their members. They often also provide other services, including credit cards, insurance and business planning. In 2010, there were 52,945 credit unions auspiced by the World Council of Credit Unions, across 100 countries. In Australia, at least 4.5 million people are members of financial co-operatives.
The owners of financial co-operatives are the user members, who are the investors and borrowers. They might belong to a specific community, organisation, workplace or religion.
Profits are mostly retained within the financial co-operative, with some donated to local organisations. Without distributions to shareholder-investors, credit unions can be competitive with major banks, and often give members a high interest rate for savings, low account fees and low interest rates on loans. Credit unions are also more likely to tailor products to suit members, make exceptions and understand their member’s personal circumstances.
Australian customer-owned financial institutions operate under the principles of the World Council of Credit Unions:
- Open and voluntary membership
- Democratic control
- Distribution to members
- Building financial stability
- Service to members
- Ongoing education
- Cooperation among cooperatives
- Social responsibility.