Lanica won't profit from waking up Co-Op

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The Independent Online
Labour has promised it would change the rules to protect the Co- Op movement from break-up but in the meantime what is the Co-Op doing to save itself? The Co-Op may have its heart in the right place but is also paralysed by its worthy democratic traditions and riven by the in- fighting of its vested interest groups. If it fails to re-invent itself, it will face death by a thousand cuts.

Take the following. The Co-Op movement is run for the benefit of the 51 different regional societies which in turn have 560,000 members between them. Individual membership costs pounds 1 for life. It is refundable if you leave but cannot be sold at a profit. Benefits include a free glossy magazine, discount vouchers in some societies, and the option to join the Co-Op Women's Guild.

Not tempted? The biggest supposed benefit is the opportunity to have your say in the running of your society going from divisional committee, to regional committee and if lucky and well connected, on to the board. It is a creaking, bureaucratic structure that would never be invented if it did not already exist. The question is what can be done to change it.

One approach would be to merge the 51 societies into one to achieve greater economies of scale. A second would be to start marketing itself on its Co-Op credentials, rather as the Co-Op Bank has done so successfully with its stance on ethical investing. A third is to revive the "divi". This scheme, which qualifies members for a 5 per cent discount, is already on test in Northern Ireland and has recently been revived in Scotland.

The overtures of the youthful Andrew Regan at Lanica Trust look doomed for one simple reason. Unlike the mutual building societies, the individual members do not actually own their society, they just qualify for a say in its operation. As that stake cannot be sold at a profit Mr Regan looks to be on a hiding to nothing. He's shaken a complacent and very dozy old organisation, but he's unlikely to make a penny for his trouble.

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