Co-op Retail Services calls for merger with big sister: Link would create organisation with sales worth pounds 4.5bn

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CO-OPERATIVE Retail Services, the second-largest co-operative society, yesterday called for a merger with its larger sister, the Co-operative Wholesale Society, in what could be the first stage in the creation of one co-operative body for the whole of Britain.

The proposal, made in a manifesto called The Time is Right, resurrects a debate that began in 1981. The most recent merger discussions were abandoned in 1990 when the two parties failed to agree on how individual and corporate society members should be represented on the board.

Yesterday, Harry Moore, chief executive of CRS, said he believed a merger must take place. 'All our competitors have a national focus. At best, the position we have is fragmented. We need a national focus, distribution facilities, buying and marketing effort to compete effectively.'

David Robinson, a director of CWS, said it would be happy to explore the issue with CRS again. 'We have been in favour of the idea since 1980, when a merger was first mooted.'

A merger would create an organisation with pounds 4.5bn sales, representing half the sales of the British co- operative movement. It would have 1,300 stores, be Britain's largest commercial farmer, arrange 20 per cent of its funerals, and deliver milk to many of its doorsteps. It would also own the Co-operative Bank.

Mr Moore would eventually like to see the other 48 co-ops join to create one national organisation.

CRS disclosed that profits in the year to January, before tax and distributions, had fallen from pounds 58.5m to pounds 35.9m, on sales of pounds 1.27bn ( pounds 1.36bn). That was largely due to a loss on the sale of its dairy interests. Excluding that, the trading surplus was pounds 5m lower at pounds 37.9m.

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