Lanica plans pounds 10m wholesale cuts for Co-op

Andrew Regan would slash annual bill and strip out layers of management

Andrew Regan would cut the Co-operative Wholesale Society's central costs by pounds 10m, introduce bumper incentive schemes for employees and prune middle management if his approach to the Co-op movement proves successful.

The details are the first to emerge of the 31-year-old's strategy if his Lanica Trust vehicle wins control of parts of the CWS's non-food interests.

Though Lanica would not comment yesterday, it is understood that it has estimated the CWS's central office costs in Manchester to be around pounds 16m per year, including heavy costs for the executive committee and support staff. Some two-thirds of the costs would be stripped out.

The Co-op employs 2,500 staff in the main Manchester offices of the CWS, Co-operative Insurance Society, the Co-op Bank and the Co-operative Union.

Lower-level jobs at the CWS would not be severely affected by Mr Regan's plans. Incentive schemes would be introduced to motivate the rank and file. These would be similar to schemes introduced at his previous vehicle Hobson, which bought the Co-op's food manufacturing businesses.

The details come ahead of the CWS annual results, due to be published on Monday. As well as confirming a poor year for the business it is expected that they will reveal details of the retirement package of the previous chief executive, David Skinner. There is speculation that it could involve a payment of two years' salary plus continued use of his company Jaguar.

Though Mr Regan has missed the deadline for resolutions for the CWS annual meeting next month, it is possible that a supportive Co-operative member could propose a special meeting to discuss the issue. It is thought that Lanica Trust would prefer its proposals to be discussed in a single-issue meeting rather than have its motion compete with a host of others at an agm. Lanica Trust also felt that using the annual meeting would have appeared hostile.

Though there have been suggestions that Mr Regan has the support of some of the regional societies, one chief executive of a small Co-op said yesterday: "We would strongly support the line taken by Graham Melmoth [the CWS chief executive] and oppose the approach that has been made. As mutuals without a fluctuating share price to distract us and through generations of accounting policies the movement has built up considerable internal reserves. But that wealth is not there to be plundered. We are the custodians of it. We are charged with cultivating it and handing it on to the next generation."

However, the chief executive added that he accepted the movement's fragmentation was a problem and that he would strongly support a merger of the CWS and Co-operative Retailer Services, the other main Co-op division.

Mr Melmoth made similar comments to a group of Co-op managers in Solihull last Friday. He is quoted in the latest issue of Co-operative News as saying it is "time to heal our split personality". Though he repeated his tough stance on the Lanica approach he said the movement should make its assets work harder. He hinted at a moving together of the CWS and CRS though he did not use the term "merger".

He said that if the two camps were to move closer they would form a stronger commercial proposition. Mr Melmoth said: "It is possible that the interesting diversion of Lanica over the last few weeks ... will help to concentrate minds."

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
News
people
Voices
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn