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Co-operatives provide a different approach to organising business through their ideals of member ownership and democratic practice. Every co-operative member has an equal vote regardless of his or her own personal capital investment. They take a variety of different forms, including consumer co-operatives, agricultural co-operatives, worker co-operatives and financial co-operatives.
Patmore, Balnave and Marjanovic provide a perspective on Australian co-operative development within a conceptual framework and international context since the 1820s by exploring the economic, political and social factors that explain their varying fortunes. Drawing upon the Visual Historical Atlas of Australian Co-operatives, a significant database of Australian co-operatives and a variety of historical sources, this book provides a detailed historical analysis of their development, from their inception in Australia to today. Australian co-operatives were heavily dependent on state sympathy for their growth and vulnerable to ideas that challenged collective organisation such as Neo-liberalism. Despite these challenges, the co-operative business model has persisted and since 2009, there has been resurgence of interest and organisation that may provide a platform for future growth.
A useful resource for practitioners, students, educators, policy makers and researchers that highlights a significant alternative
business model to the Investor-Owned Business and state enterprise.
Greg Patmore is Emeritus Professor of Business and Labour History at the University of Sydney Business School. He is author of The InnovativeConsumerCo-operative:TheRiseandtheFallofBerkeley (Routledge, 2020). His primary research interest is the history of cooperatives and mutuals.
Nikola Balnave is an associate professor in the Macquarie Business School, Macquarie University, NSW, Australia. Her primary focus of research is on co-operatives and the co-operative movement over space and time. Nikki is the co-author of A Global History of CooperativeBusinesswith Greg Patmore.
Olivera Marjanovic (PhD) is a professor in the Macquarie Business School, Macquarie University, NSW, Australia. Her research focuses on the human side and societal impact of new technologies such as visual analytics, AI and digital platforms. She is passionate about cooperatives and their societal impact.
A History of Australian Cooperatives 1827–2023
Greg Patmore, Nikola Balnave and Olivera Marjanovic
First published 2024 by Routledge
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ISBN: 978-1-032-32037-3 (hbk)
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DOI: 10.4324/9781003312482
Typeset in Galliard by codeMantra
To Gary Lewis
1 What Is a Co-operative?
2 An International Co-operative Movement
3 An Australian Overview – Insights from the Visual Historical Atlas of Australian Co-operatives
4 The Early Years until 1860
5 The Long Boom 1860–1890
6 The 1890s Depression and Its Aftermath 1890–1914
7 Wars and Depression 1914–1945
8 Post-war Prosperity 1945–1975
9 The Challenges of Neo-liberalism 1975–2009
10 A Revival? 2009–2023
11 Conclusion
Figures and Tables
Figures
1.1 CWS Gravy Salt. Photographer Greg Patmore
2.1 Rochdale Toad Lane Store as a Museum. Courtesy of the Berkeley Historical Society
2.2 Holyoake House in Manchester. Photographer Greg Patmore
3.1 Trends for All Co-operatives, Agricultural Co-operatives, Community Co-operatives, Consumer Co-operatives and Financial Co-operatives (VHAAC Version 31.0 July 2023)
3.2 Trends for Business, Housing, Worker (including producer), Indigenous and Education/Training Co-operatives (VHAAC Version 31.0 July 2023)
3.3 State Trends for Co-operatives (VHAAC Version 31.0 July 2023)
4.1 William Duncan. Courtesy of Museum of History NSW –State Archives Collection: NRS-4481-3-[7/16334]-St3181, Government Printing Office 1 – 10809 – W.A. Duncan, Excollector of Customs
5.1 Australian Co-operative Trends 1860–1890 (VHAAC Version 31.0 July 2023)
6.1 Australian Co-operative Trends 1890–1914 (VHAAC Version 31.0 July 2023)
6.2 The Newcastle & Suburban Co-operative Society Ltd, Circa 1910. Courtesy of Historical Photo Collection, Special Collections, University of Newcastle, Australia, A5969iv
7.1 Australian Co-operative Trends 1914–1945 (VHAAC Version 31.0 July 2023)
7.2 Australian Agricultural Co-operative Trends 1914–1945 (VHAAC Version 31.0 July 2023)
7.3 Australian Consumer Co-operative Trends 1914–1945 (VHAAC Version 31.0 July 2023)
7.4 Australian Co-operative Tokens. Photographer Greg Patmore
8.1 Kevin Yates, 1969. Courtesy of Australian Mutuals History
8.2 Australian Co-operative Trends 1945–1975 (VHAAC Version 31.0 July 2023)
8.3 Australian Financial Co-operative Trends 1945–1975 (VHAAC Version 31.0 July 2023)
8.4 Australian Agricultural Co-operative Trends 1945–1975 (VHAAC Version 31.0 July 2023)
8.5 Australian Consumer Co-operative Trends 1945–1975 (VHAAC Version 31.0 July 2023)
9.1 Australian Co-operative Trends 1975–2009 (VHAAC Version 31.0 July 2023)
9.2 Australian Financial Co-operative Trends 1975–2009 (VHAAC Version 31.0 July 2023)
9.3 Australian Agricultural Co-operative Trends 1975–2009 (VHAAC Version 31.0 July 2023)
9.4 Australian Consumer Co-operative Trends 1975–2009 (VHAAC Version 31.0 July 2023)
9.5 Mary Stone, Credit Union Member, at Rediteller, 1984. Courtesy of Australian Mutuals History
10.1 Trends for All Australian Co-operatives 2009–2023 (VHAAC Version 31.0 July 2023)
10.2 Trends for Financial Co-operatives 2009–2023 (VHAAC Version 31.0 July 2023)
10.3 Trends for Agricultural Co-operatives 2009–2023 (VHAAC Version 31.0 July 2023)
10.4 Trends for Consumer Co-operatives 2009–2023 (VHAAC Version 31.0 July 2023)
3.1 Types of Australian Co-operatives 1827–2023 (VHAAC Version 31.0 July 2023)
3.2 Top Ten Locations for Australian Co-operatives since the 1820s (VHAAC Version 31.0 July 2023)
3.3 Top Ten ABS SA3 Regions for Australian Co-operatives since the 1820s (VHAAC Version 31.0 July 2023)
3.4 Average Life Span of Major Types of Australian Cooperatives (VHAAC Version 31.0 July 2023)
4.1 Building Societies Formed in Victoria 1848–1860 (Victorian Returns of Friendly Societies)
Acknowledgements
We wish to acknowledge the support of many people and institutions that made the completion of this book possible. Thank you to Trent Bartlett, Sam Byrne, Allen Cooper, Bruce Goodwin, Alan Greig, Ken Mogridge, Melina Morrison, Richard O’Leary, Rod Petersen, Andrew Peterson and Peter Wells for agreeing to participate in the interviews cited in this book. We also thank the Business Council of Cooperatives and Mutuals, CBH, the Co-op Federation, Community Cooperative Store (Nuriootpa), Junee Co-operative, Killarney Cooperative, NORCO, Mercury Co-operative and Terang Co-operative for access to documentary sources and photographs. Thank you to the staff of the Battye Library, Berkeley Historical Society, Charles Sturt Regional Archives, Coalfields Museum and Historical Research Centre (Collie, WA), National Co-operative Archive in Manchester, particularly Sophie Stewart, My Mutual History, particularly Ben Woods, the State Library of Queensland, the State Library of NSW, the State Library of South Australia, the University of New England Archives, and the University of Newcastle Archives, for their assistance with documentary research and photographs. This book would not be possible without Trove and the National Library of Australia. We acknowledge the assistance of the members of the public service in all the state jurisdictions responsible for the registration of co-operatives and the various state archives. Our special thanks to Merilyn Bryce, Marrisa Costello, Peter Gates, Greg McNamara, Mark Myers, Wally Newman and Mark Westcott. We thank Yong Ling Lam, Kendrick Loo and Chelsea Low, from Routledge, for their support and encouragement. The research was
funded from a variety of sources, including the Business Council of Co-operatives and Mutuals, the University of Sydney Business School through the Co-operatives Research Group and the Australian Research Council (DP170100573). We also thank our research assistants Garry Cronan, Yasmin Rittau, Caitlin Gardner and particularly Jiang Zhu, who has worked continuously on the Visual Historical Atlas of Australian Co-operatives since 2017. Last but by no means least to Boris, Helen and Michael, thank you for your continuing support and encouragement.
Abbreviations
ABACUS
ABM
ABS
ACC
ACCCS
ACCM
ACCORD
ACP
ACT
ACWS
ADB
AFCUL
AFR
AGM
AMH
AMWU
Association of Building Societies and Credit Unions
Australian Board of Missions
Australian Bureau of Statistics
Australian Association of Co-operatives
Association of Catholic Co-operative Credit Societies
Adelaide Co-operative Committee Minutes
Australian Centre for Co-operative Research and Development
Alf Clint Papers, Tranby Aboriginal College Archives, Glebe, NSW
Australian Capital Territory
Australian Co-operative Wholesale Society
Australian Dictionary of Biography
Australian Federation of Credit Unions Limited
Australian Financial Review
Annual General Meeting
Australian Mutuals History, Sydney
Amalgamated Metal Workers Union
ANU
APRA
APWCF
ASBS
ASX
ASIC
ASSLH
AUBS
AWB
AWC
AWFC
BCCM
BCS
BD
CBCS
CBD
CBS
CBH
CCA
CCF
CCPS
CCU
CDP
CEHF
Australian National University
Australian Prudential Regulation Authority
Australian Producers’ Wholesale Co-operative Federation
Adelaide and Suburban Building Society
Australian Stock Exchange
Australian Securities and Investment Commission
Australian Society for the Study of Labour History
Australian Union Benefit Society
Australian Wheat Board
Amalgamated Wallaroo Co-operative
Australian Wheat and Flour Company
Business Council of Co-operatives and Mutuals (Australia)
Bega Co-operative Society
Board of Directors
Commonwealth Bureau of Census and Statistics
Central Business District
Co-operative Building Societies (NSW)
Co-operative Bulk Handling (Australia)
Co-operatives Council of Australia
Christian Co-operative Fellowship
Core Consistent Provisions Scheme
Co-operative Capital Units
Co-operative Development Program (Victoria)
Common Equity Housing Finance (Victoria)
CENSW
CEO
CF
CFA
CFCS
CFG
CFNSW
CFQ
CFWA
CHS
CICSM
CMHRC
CN
CNL
CNUK
COBA
CRC
CSA
CSASS
CSCSV
CSHA
CSR
Common Equity NSW
Chief Executive Officer
The Co-op Federation
Co-operative Federation of Australia
Coastal Farmers’ Co-operative Society
Co-operative Food Group
Co-operative Federation of NSW
Co-operative Federation of Queensland
Co-operative Federation of Western Australia
Co-operative Housing Societies (NSW, Queensland and Victoria)
Collie Industrial Co-operative Society Minutes
Coalfields Museum and Historical Research Centre (Collie, WA)
Co-operative News (Australia)
Co-operatives National Law
Co-operative News (UK)
Customer Owned Banking Association
Chambers Research Collection, The University of Sydney
Co-operative Supermarkets Australia
Colonial Society for the Advancement of the Social System (Sydney)
Civil Service Co-operative Society of Victoria
Commonwealth State Housing Agreement
Corporate Social Responsibility
CU
CUIA
CUFA
CUNA
CUSCAL
CWS
DFC
EEC
FT
GDP
GFC
GNCC
HPF
ICA
IMBS
IOB
IPSA
IYC
KCDA
MCC
MGC
MRC
MOB
NCA
Co-operative Union (UK)
Credit Union Industry Association
Credit Union Foundation of Australia
Credit Union National Association (US)
Credit Union Services Corporation of Australia
Co-operative Wholesale Society (England)
Dairy Farmers’ Co-operative Milk Company, later
Dairy Farmers Co-operative
European Economic Community
Farming Together
Gross Domestic Product
Global Financial Crisis
Gippsland and Northern Co-operative Company (Victoria)
Horace Plunkett Foundation (UK)
International Co-operative Alliance
Illawarra Mutual Building Society
Investor Owned Business
Industrial and Provident Societies Act
International Year of Co-operatives (UN, 2012)
Killarney Co-operative Dairy Association
Ministerial Council for Consumer Affairs (Australia)
Murray-Goulburn Co-operative
Macleay Regional Co-operative
Member Owned Business
National Co-operative Archives (Manchester)
NCB
Nd
NDCA
NGMG
NMH
NPBS
NORCO
np
NSCS
NSW
NSWACBS
NSWCL
NSWCSA
NSWCWS
NSWCU
NSWGG
NSWSAR
NETC
NT
NZ
OFWCF
PFCS
PNG
PPCA
National Centre for Biography (ANU)
No date
Northern District Co-operative Association (Australia)
Newcastle Greater Mutual Group
Newcastle Morning Herald (Australia)
Newcastle Permanent Building Society
North Coast Co-operative Company
no pages
Newcastle and Suburban Co-operative Society
New South Wales (Australia)
NSW Association of Co-operative Building Societies
South West Timber Hewers’ Co-operative Society (WA)
Tasmanian Archives and Heritage Office, Hobart, Australia
Traditional Credit Union (NT)
Tasmanian Egg Floor (Hobart) Co-operative
Teachers Mutual Bank
University Co-operative Bookshop
UN
UNEA
US
USA
USDA
UWA
VCA
VGG
VHAAC
WA
WAPCU
WCG
WDCPD
WEA
WFL
WOCCU
YCW
United Kingdom
United Nations
University of New England Archives (Armidale)
United States
United States of America
United States Department of Agriculture
University of Western Australia
Victorian Co-operative Association
Victorian Government Gazette
Visual Historical Atlas of Australian Co-operatives
Western Australia
WA Producers Co-operative Union
Women’s Co-operative Guild (UK)
Western District Co-operative Produce Company
Workers’ Educational Association
Westralian Farmers Limited (Australia)
World Council of Credit Unions
Young Christian Workers
1 What Is a Co-operative?
DOI: 10.4324/9781003312482-1
This chapter provides a framework for understanding the history of Australian co-operatives, which is the focus of this book. The chapter explores the meaning of the term co-operative, as a Member-Owned Business (MOB), particularly drawing upon the early principles of the Rochdale consumer co-operative movement and more recently the International Co-operative Alliance (ICA), which is the international body of the co-operative movement founded in 1895 (ICA, 1895). While these principles have guided the co-operatives, they might not be strictly followed in practice and there can be cultural and geographical variations. The chapter then looks at the variety of different types of co-operatives. While consumer co-operatives were the major focus of co-operation during the mid-nineteenth century, there are now multiple types of co-operatives that have since developed, including agricultural, worker, financial and business cooperatives. The lines between different types of co-operatives can blur and co-operatives may transform themselves from one type to another across time. The chapter then compares co-operatives to other forms of business organisations including mutuals and the Investor-Owned Business (IOB) and explores the relationship of cooperatives to ideas such as the shared economy. Finally, the chapter concludes by exploring historical factors that account for the formation and fluctuating fortunes of the co-operatives both at the local and national levels.
Defining a Co-operative
The co-operative is an MOB as opposed to an IOB. Members either work for the co-operative as in the case of a worker co-operative or consume goods and services such as groceries as in the case of a consumer co-operative, or grain storage facilities as in the case of an agricultural co-operative. Johnston Birchall (2011b, p. 4) has defined an MOB as a
business organization that is owned and controlled by members who are drawn from one (or more) of three types of stakeholder – consumers, producers and employees – and whose benefits go mainly to these members.
MOBs provide goods and services to members, and while they are sometimes considered to be “non-profit,” they must make a surplus to cover costs and provide for future capital investments. MOBs are contrasted to IOBs, with the focus of the former being on people and the latter on money. Investors can appropriate profits and increases in share value, whereas members can take the surpluses and give priority to other objectives such as quality of service, community assistance and better conditions for employees. More generally, the existence of a member-owned sector provides more choice for members who may value the benefits of membership over the goods and services (Birchall, 2011b, pp. 8–9).
Co-operatives as MOBs have been defined by a set of principles. The origins of these principles lie in the formation of the Rochdale consumer co-operative model in 1844, in the wake of an unsuccessful weavers’ strike over wages. A group of “pioneers,” dominated by skilled and supervisory trades, in Rochdale, England, started the movement to combat low wages, high prices and poor quality food (Patmore and Balnave, 2018, p. 2). As Wilson, Webster and Vorberg-Rugh note (2013, p. 37) the “principles of this model both spread across the world and survived to the present as the ‘ideal’.”
Birchall (1994, pp. 54–64) noted that there were nine fundamental principles set out in the early rules and publications of the Rochdale co-operative. The first principle related to democracy and the Rochdale consumer co-operatives differ from other businesses in that management is based on democratic principles with “one member one vote” rather than “one share one vote.” This meant that someone holding 100 shares had the same number of votes as someone holding one share. These rights also extended to women before they had the right to vote in the political sphere. The second principle was open membership whereby individuals had an opportunity to join of their own free will (Birchall, 2011a, p. 7). The third principle was fixedandlimitedinterestoncapital. This principle recognised the need to attract capital through members’ shares not only by rewarding shareholders with interest on their shares but also limiting the interest payment on shares so that it did not undermine the need to reinvest capital in the co-operative to ensure the maintenance and upgrading of facilities. This principle was also linked with limitations on size of shareholdings to ensure that wealthy individuals did not use their economic influence to distort the democratic process (Wilson, Webster and Vorberg-Rugh, 2013, pp. 38–39). The fourth principle was the distribution of thesurplus as a dividendonpurchases. This is the “divi” associated traditionally with consumer co-operatives and the dividend encouraged forced saving by members and gave the co-operative a short-term capital boost as dividends tended to be paid quarterly, for example, at a rate of 6 per cent on their purchases. In worker co-operatives, the dividend could be distributed from the surplus based on member’s wages (Holyoake, 1893, p. 156; Webb and Webb, 1930, pp. 12–15).
The fifth principle was cashtrading. There was strong hostility to giving credit to poorer people because of the growth of debt and many earlier co-operatives had failed due to the provision of unsecured excessive credit. There was a hope that this principle would encourage thrift among members, who would not live beyond their means (Cole, 1944, pp. 69–70; Wilson, Webster and VorbergRugh, 2013, pp. 40–42). The sixth principle was to sell onlypureand unadulterated food. This reflected a widespread mid-nineteenth
century practice of substituting cheaper and even dangerous ingredients such as water in milk and sawdust in bread to reduce the costs of production (Cole, 1944, pp. 70–71). The seventh principle was education. Education related to learning co-operative principles but also to technical education and the “intellectual improvement” of members, highlighting a belief that education could improve moral character. There would be a levy on funds to finance educational programs (Birchall, 1994, pp. 61–62; Cole, 1944, pp. 71–72). The eighth principle was political and religious neutrality. This was to avoid conflict in the early co-operative movement. However, there is no evidence that early members were denied membership on political and religious grounds. The final principle was the disposalof netassetswithoutprofittomembers. If the co-operative was wound up, then members would receive what they held in their share accounts and any remaining assets would be distributed to other cooperatives and charities. This would stop individuals from trying to take over the co-operative to gain control over its assets (Birchall, 1994, pp. 62–63).
Despite the significance of Rochdale principles, they were not necessarily strictly followed by co-operatives. For example, there were consumer co-operatives that breached the principle of cash only transactions in favour of credit for reasons such as the provision of credit facilities by competitors, seasonal variations of rural income and the impact of unfavourable economic and industrial events such as strikes on household income. Co-operatives have taken loans from non-members and allowed outside investors to purchase shares to raise capital, which can undermine democratic control by members. The principle of political neutrality has been difficult to observe, with Rochdale consumer co-operatives in the United Kingdom (UK) forming the Co-operative Party in 1917 and entering an electoral alliance with the Labour Party in 1927 (Patmore and Balnave, 2018, p. 3).
The ICA from 1930 became a forum to redefine the Rochdale principles considering the wide variation of practice by co-operatives (Patmore and Balnave, 2018, p. 4). Two principles that fell out of favour over time were cash trading and political and religious
neutrality. The former was viewed as a business practice rather than a key principle, while the latter clashed with the political culture of some co-operative movements which had organised on political or religious lines. The ICA after an extensive survey of its members in 1995 came up with the following seven fundamental principles to define the co-operative identity: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; co-operation among co-operatives; and concern for community (Birchall, 1997, pp. 57–65; 2011b, p. 196). The ICA (2022) broadly defines a co-operative as “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise.” It further notes that “cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity.”
Co-operative Types
While there are a variety of different types of co-operatives, including worker, agricultural, financial and business co-operatives, the retail consumer co-operative was the focus of the early cooperative movement. Consumer retail co-operatives supply goods and services to members. Members purchase shares in the cooperative and elect a board of management to govern the cooperative. The board of management appoints managers to run the co-operative and purchase goods for the co-operative. The traditional Rochdale model involves consumers receiving dividends on their purchases and interest on their shares and other investments in the co-operative such as member bonds. Cooperative shares are not publicly traded but remain in the cooperative if a member leaves or dies. To survive and prosper, the cooperative must have a sufficient surplus after paying a dividend and interest to invest in improvements, particularly in a competitive retailing environment. There are variations, for example, with
members paying an annual fee and receiving member discount prices rather than dividends (Birchall, 2011b, pp. 43–64).
One important extension of retail co-operatives is wholesale cooperatives. While many retail consumer co-operatives developed relationships with non-co-operative wholesalers to survive, there were early examples of opposition from traditional wholesalers and manufacturers to supplying co-operatives. There were also concerns about consumer co-operatives bidding against each other in a competitive market. In the early years of the movement in Great Britain, the purchasing of stock was a major concern to co-operative management committees and managers were subject to greater scrutiny than in non-co-operative retailers (Purvis, 1998, pp. 57–61).
As Gurney (1996, p. 94) notes, “wholesaling was vital to cooperative success as it reduced costs and helped solve the problem of boycotting; with a strong wholesale organization, co-operators could buy their supplies directly from the manufacturer, thereby cutting out the capitalistic middleman.” To meet these issues in Great Britain, the English Co-operative Wholesale Society (CWS) and the Scottish Co-operative Wholesale Society (SCWS) began trading in 1864 and 1868, respectively (Birchall, 1994, pp. 81–87). One of the important developments associated with the rise of these wholesale bodies was the creation of a common co-operative label. The CWS in the UK initiated branding its own name for its own produce and some of its suppliers. A notable example occurred in July 1884 when the CWS made a deal with Armour and Company, a leading United States (US) meat processer, to produce tinned meat with the CWS label (Figure 1.1; Webster, Wilson and Vorberg-Rugh, 2017, p. 579). The survival of consumer co-operatives since the Second World War has rested partially on their ability to develop integrated systems of wholesaling to match the economies of the larger non-co-operative retail chains (Ekberg, 2012, pp. 1007, 1115).
Worker co-operatives provide a direct way for workers to control their production and shape the economy. Workers who are employees of consumer co-operatives can be members of the consumer co-operative but have their rights within a consumer cooperative limited in terms of representation on the Board of Directors (BD) due to a perceived conflict of interest and a view that consumers’ interests are paramount over workers (Balnave and Patmore, 2006, p. 61; Wetzel and Gallagher, 1987, pp. 519–521). In the UK, the term producer co-operative is also used when discussing worker co-operatives. Wilson, Webster and Vorberg-Rugh (2013, p. 44) define producer co-operatives as “a producer/industrial organization owned at least partly by the workforce, which shared
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