An old and widespread form is the consumers' cooperative, in which people organize for wholesale or retail distribution, usually of agricultural or other staple products. Traditionally, membership is open, and anyone may buy stock. Goods are sold to the public as well as to members, usually at prevailing market prices, and any surplus above expenses is turned back to the members. Money is saved through direct channeling of goods from producer to consumer. Producers' cooperatives are manufacturing and distributive organizations, commonly owned and managed by the workers. Another development in such cooperatives has been the acquisition of failing manufacturing plants by labor unions, who run them on a cooperative basis. Agricultural cooperatives usually involve cooperation in the processing and marketing of produce and in the purchase of equipment and supplies. Actual ownership of land is usually not affected, and in this way the agricultural cooperative differs from the collective farm. Agricultural cooperatives are often linked with cooperative banks and credit unions, which constitute another important type of cooperative. There is also cooperative activity in insurance, medical services, housing, and other fields.
The origin of cooperative philosophy is found in the writings and activities of Robert Owen, Louis Blanc, Charles Fourier, and others. Its early character was revolutionary, but under the impact of such movements as Christian Socialism this aspect diminished. After some early 19th-century experiments, consumers' cooperation took permanent form with the establishment (1844) of the Rochdale Society of Equitable Pioneers in England.
The cooperative movement has since had considerable growth throughout Great Britain and the Commonwealth, where local cooperatives have been federated into national wholesale and retail distributive enterprises and where a large proportion of the population has membership. Various examples of cooperative organization are also found in the Scandinavian countries, Israel, the People's Republic of China, Russia, and France. In the United States the cooperative movement began in the 19th cent., first among workers and then among farmers. The National Grange, a farmers' cooperative, was founded in 1867 and later exercised considerable political influence (see Granger movement). An international alliance for the dissemination of cooperative information was founded in 1895. Today the major types of cooperatives include those of farmers, wholesalers, and consumers, as well as insurance, banking and credit, and rural electrification cooperatives (the growth of the latter two facilitated by loans from the federal government). There has been increasing international collaboration among the various kinds of cooperatives and a growing trend toward the establishment of international cooperative distribution.
See J. Berry and M. Roberts, Co-op Management and Employment (1984); E. Spanner, Brotherly Tomorrow (1984); G. Melnyk, The Search for Community (1985).
The first consumer cooperative may have been founded on March 14, 1761, 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.
By 1830, there were several hundred co-operatives. Some were initially successful, but most cooperatives founded in the early 19th century had failed by 1840. However, Lockhurst Lane Industrial Co-operative Society (founded in 1832 and now Heart of England Co-operative Society), and Galashiels and Hawick Co-operative Societies (1839 or earlier, now Lothian, Borders & Angus Co-operative Society) still trade today.
It was not until 1844 when the Rochdale Society of Equitable Pioneers established the ‘Rochdale Principles’ on which they ran their cooperative, that the basis for development and growth of the modern cooperative movement was established.
By the 1990s, CWS's share of the market had declined considerably and many came to doubt the viability of co-operative model. CWS sold its factories to Andrew Regan in 1994. Regan returned in 1997 with a £1.2 billion bid for CWS. There were allegations of "carpet-bagging" - new members who joined simply to make money from the sale - and more seriously fraud and commercial leaks. After a lengthy battle, Regan's bid was seen off and two senior CWS executives were dismissed and imprisoned for fraud. Regan was cleared of charges. The episode recharged CWS and its membership base. Tony Blair's Co-operative Commission, chaired by John Monks, made major recommendations for the co-operative movement, including the organisation and marketing of the retail societies. It was in this climate that, in 2000, CWS merged with the UK's second largest society, Co-operative Retail Services.
Its headquarter complex is situated on the north side of Manchester city centre adjacent to the Manchester Victoria railway station. The complex is made up of many different buildings with two notable tower blocks of New Century House and the solar panel-clad CIS tower.
Other independent societies are part owners of the Group. Representatives of the societies that part own the Group are elected to the Group's national board. The Group manages The Co-operative brand and the Co-operative Retail Trading Group (CRTG), which sources and promotes goods for food stores. There is a similar purchasing group (CTTG) for co-operative travel agents.
In the UK, co-operatives formed the Co-operative Party in the early 20th century to represent members of co-ops in Parliament. The Co-operative Party now has a permanent electoral pact with the Labour Party, and some Labour MPs are Co-operative Party members. UK co-operatives retain a significant market share in food retail, insurance, banking, funeral services, and the travel industry in many parts of the country.
In Denmark there has been also a strong cooperative movement. Read about it at Danish cooperative movement