In 1844 28 weavers from Rochdale England set up the Rochdale Pioneers society to buy food and sell to its members at the same price that the food would be sold to shops. This is known as selling wholesale and enabled the weavers to combat the high food prices that had prompted them to set up their society. This type of society is known as a co-operative and allowed the members to buy food cheaper than that sold in the shops. It is estimated that by 1990 there were 80 co-operatives in existence. A Co-operative is a mutual organisation which means that it is owned by its members and does not have any shareholders. Profit made by the co-operative is distributed amongst the members (owners) of the co-operative through reinvesting back into the business.
The Rochdale Pioneer Society grew into what is known today as the Co-operative group. The Co-operative group have a wide range of businesses including food, travel, pharmacies, legal services, banking, funerals, insurance and investments.
Industrial and Provident Societies Acts
In 1852 the first Industrial and Provident Societies Act was enacted in the UK . Since then further legislation concerning Co-Operatives has been enacted. Co-operatives are governed by the Industrial and Provident Societies Acts in the UK , Ireland and New Zealand . If an organisation registers under the Industrial and Provident Societies Act they are:
granted legal status, and
are protected by limited liability
Whilst being able to continue trading as a mutual organisation. To be able to register a society must prove that its activities are carried out to benefit the community.
If a Co-Operative is not registered as a Co-Operative society under the Industrial and Provident Societies Acts it will be known as a Co-Operative venture. Co-Operative ventures can take many forms including the Trading Co-Operative and the Workers Co-Operative. The former allows groups of individuals to pool their resources to store and distribute their produce in a manner that they would not be able to do by themselves.
A Workers Co-Operative is created when the workers of a business (usually a struggling business) take over the ownership and management of the business. By undertaking the management and ownership the workers hope to save the business and their jobs. The members can participate in the decision making for the business and the profits are shared equally amongst them.
A producer Co-operative is a group of people carrying out a co-operative business which involves producing goods, followed by marketing and directly retailing (selling to consumers) the products they produce.
A consumer co-operative is set up to enable its members to benefit from lower prices by buying things in bulk. Things bought in large quantities are usually cheaper than things bought in small quantities. Once the Co-operative has bought items in bulk, the members will buy the small amount they need from the consumer co-operative.