Governance as a Determinant of Success and Failure: What Other Co-ops Can Learn from Co-op Atlantic
Fairbairn, B., Fulton, M., & Pohler, D. (November 2015) Governance as a Determinant of Success and Failure: What Other Co-ops Can Learn from Co-op Atlantic. Centre for the Study of Co-operatives: University of Saskatchewan.
Co-op Atlantic is not the first federation of retail co-operatives to fail. Others have failed in Québec, France, Germany, and elsewhere. Co-op Atlantic’s story is a recent example of a pattern from which others can learn. We believe it is important for other co-operatives to pay attention to lessons from Co-op Atlantic’s story — lessons that in our view ultimately come down to governance choices and behaviours.
In 2012, Co-op Atlantic observed its eighty-fifth anniversary and was celebrated as the largest co-operative in Atlantic Canada. As a federation of local retail co-operatives, Co-op Atlantic’s role was to strengthen and support the member co-ops, in particular by providing wholesale goods and services to them in three core areas: food, petroleum products, and agricultural supplies. Its president told delegates present at the annual meeting that “Co-op Atlantic has shown its ability to transform itself, while remaining an essential link between communities of the Atlantic region.” Three years later, in May 2015, the co-op sold its grocery and gasoline business to rival Sobeys. And after filing for bankruptcy protection, Co-op Atlantic proceeded systematically to sell its remaining assets. In October 2015, the co-op sold its fuel business — Co-op Energy — to CST Canada, another private company. Finally, in November 2015, the co-op announced the sale of most of its remaining agricultural supply business to La Coopérative fédérée du Québec. Farmers and the surviving retail co-ops in the region now obtain products and services from these new suppliers. The dream of a united co-operative system span ning the chain from farmers to consumers has come to an end. Co-op Atlantic operated for eighty-eight years and helped sustain consumers, farmers, employees, and communities as co-operatives typically do. An enterprise that survives for more than three generations is not a flawed model. However, Co-op Atlantic’s demise represents a loss of future possibilities. Could it have been prevented? Can other co-ops prevent such a turn of events?