The Rise of Food Cooperatives and Food Buying Groups; Consumer Power and Sustainable Living

Cooperatives are often established by a group of volunteers who provide goods and services to their local community, for the benefit of their local community.

In many respects ideologically driven, cooperatives aim to enhance and improve the social, economic and cultural aspects of life for their members and users.

The overriding principle of food cooperatives, however, is to provide high quality, affordable, locally produced, food to their users.

Food cooperatives can take the form of not for profit organisations which are manned by volunteers, consumer cooperatives which are owned and run by the people who use the service, or a workers cooperative which is owned and operated by employees.

Not for profit food cooperatives are able to provide affordable food to their users by:

• Pooling together their resources (money) and buying directly from the supplier, therefore, cutting out the middle man (supermarket) and the additional cost.
• Smaller operations, who may only have a few members, will pool their orders together and order as one customer. Bulk buying in this way reduces costs significantly.
• As not for profit food coops do not employ their members and are not accountable to share holders, wages and profits do not figure into the equation.

Consumer cooperatives are able to provide affordable food to their users by:

• Aiming to provide the highest quality goods (food) for the lowest possible price. Unlike the business model adopted by the major supermarkets (to sell goods at the highest price that the consumer is willing to pay in pursuit of high profits for share holders) A consumer cooperative will either; re-invest any accumulated capital into the business to meet the needs of the local community/consumer/owner, or, distribute the capital to consumer/owners as an over payment.

Workers cooperatives are able to provide affordable food to their users by:

• As the mission of a workers cooperative is to maintain or create employment locally, the community as a whole benefits economically. Having said that, the Rochdale principles, also underpin the ethos of workers cooperatives, which means they are ideologically driven to work for the benefit of others in their community.

In addition to providing the users/local community with affordable food, many coops are also committed to finding and supplying ethically sourced food. For example, organic and fair trade products.

Every food cooperative is unique, some operate from market stalls, stores and warehouses, whilst others operate on a mobile basis from the back of a van. Having said that, a good majority of food cooperatives were established from an individual's sitting room, initially they were food buying groups, which later expanded and evolved to become food coops. Even though some food cooperatives are manned by volunteers, they also have the potential to create jobs in the area in which they have been established.

But I can buy cheap food at the supermarket, and supermarkets create jobs for the community, right?

Wrong. According to Corporatewatch, The British Retail Planning Forum (1998) concluded that 276 local jobs are lost every time a new supermarket opens its doors for the first time. That's a worrying statistic, and one wonders how the opening of new a supermarket could have such a negative impact locally. The reasons are varied and diverse, however cumulatively, supermarket practices often lead to economic stagnation in local communities in three distinct ways.

Price wars between supermarkets, particularly when a new supermarket opens, leaves smaller independent retailers unable to compete when the large supermarkets, not only have the advantage of buying power, but are also able to sell goods below cost. This can be devastating for local enterprise, putting some out of business altogether, or ensuring that they have to lay off employees in order to stay afloat.

In the UK alone, the four monopolistic supermarkets control no less than 80% of the food market. And yet, they only deal with a very small number of suppliers. In reality, this means that whenever a new supermarket opens it's doors and starts to compete and take business from smaller retailers, local producers and suppliers (including farmers) are unable to tender for contracts that they once held with the smaller retailer, often resulting in substantial losses and even liquidation.

Many new supermarkets are built on the edge of town and offer free parking for their customers. This initiative alone dramatically reduces footfall in the local towns, affecting all retailers negatively, not just grocery retailers. Thus, leading to the emergence of empty retail units and ghost towns.

For each business that fails because it is unable to compete with, or supply to, the large supermarkets, a domino effect is created. The presence of a new large supermarket is felt throughout the supply chain, resulting in further redundancies and/or commercial liquidations. From window cleaners to transport companies, small stationers to local cleaning contractors, the effects are reverberated throughout the local business community.

Moreover, at the time of writing, many local authorities are having to reduce the number of staff due to Government cuts. Empty retail units and loss of revenue from town centre car parks only serve to exacerbate economic decline in the area.

According to the Competition Commission, supermarkets raise their prices to pre-price war levels when they have eliminated all competition, or when strong competition has been eliminated. And that's not all, the Citizens' Organising Foundation also found that supermarkets charge higher prices in poorer areas than they do in more affluent towns. Individuals from lower socio-economic groups are less likely to have transport, which means they are less able to go in search of cheaper foods, hence they become 'captive' shoppers, enabling the large supermarkets to charge as they wish.

Food cooperatives can help to create employment within a variety of sectors, not just within agriculture.

Sustainable food organisations have a significant impact on local economies. When money from a community food chain circulates throughout the local economy, a number of sustainable jobs are created throughout a variety of sectors, such as tool manufacture, composting, food production, catering, retail and food processing to name but a few.

In fact, a study by the New Economics Foundation found that for every £1 spent on an organic box scheme, £2.40 was channeled back into the local economy, compared to just £1.20 when £1 was spent at the local supermarket. Furthermore, as farmers and suppliers are able to take a greater share of revenue compared to the amount received when dealing with supermarkets, manual workers such as farm labourers also see a rise in their earnings.

Moreover, farms which are involved in the local food sector create more employment than those who are involved in the conventional agriculture sector. Just like the opening of a new supermarket can create a ripple amongst local enterprise, so can food cooperatives, only in the case of the latter the ripple is beneficial for everyone.

Every Little Hurts: Why Tesco needs to be tamed. Friends of the Earth. (2004)

Sweatshop Salads. Felicity Lawrence (The Ecologist)

Supermarkets, a report on the supply of groceries from multiple stores in the united Kingdom, Volume 1. The Competition Commission (2000)

Supermarket sweep- how retail giants are creaming off high street profits'. The Guardian (2004)

Captive state. George Mombiot (2000)

Ghost Town Britain 11, Death on the High Street. New Economics Foundation. (2003)

Wikipedia.org

Corporatewatch.org

University of Wisconsin Center for Cooperatives, research on the economics of cooperatives.