The Southern Co-op has dismissed an approach from the UK’s largest independent co-operative society OurCoop, which appeared to offer an alternative to its proposed merger with The Co-op Group.
Correspondence between Southern and OurCoop has been published on the former’s website. OurCoop made an initial approach to Southern on 20 April in a letter to Southern Co-op chair Janet Paraskeva from OurCoop president Elaine Dean and CEO Debbie Robinson.
While stopping short of any formal proposal, the OurCoop letter expressed a desire for Southern to remain independent and for the two societies to work more closely together.
“We have also long admired Southern’s deep commitment to member and community engagement, which is something we recognise and share,” the letter explained.
“We believe there is real potential for our societies to build on our existing relationship – on membership, on campaigning, on community programmes – in ways that would benefit the members of both our societies and the communities we serve alongside one another.”
It went on to say: “We would warmly welcome continued dialogue between our societies about the future of the co-operative movement. Our own recent experience of coming together has given us learnings we would be very glad to share and we believe there is real value in independent societies staying in close contact with one another, particularly at moments like this. Our door is always open to you, please do feel able to be in touch at any point, in whatever way would be most helpful.”
OurCoop also issued a request that its letter be shared with the Southern board ahead of a Special General Meeting called by Southern for 6 May, at which it plans to conclude the voting process of members regarding the Co-op Group merger.
However Southern issued a response on 23 April from Paraskeva and its CEO Ben Stimson, in which it explained there was no viable alternative to the Co-op Group deal.
The Southern Co-op letter read: “We have been meeting weekly for the past four months to address serious financial difficulties facing the society which came to light at the end of last year. The proposal to merge with the Co-operative Group has been made out of financial necessity.
“Over the past four months the board undertook extensive contingency planning and considered whether support of the necessary scale and liquidity (which between now and the end of June is £40m-£50m) could be realistically available elsewhere. Having done so, the board concluded that it was not.”
It concluded by saying: “We are deeply conscious of the importance of independent societies and proud of Southern’s heritage, just as you are of yours. We want to confirm that this decision has not been easy for the board or management and has only been taken after exhausting all viable alternatives made available to us. While difficult, the board believes it is the right decision and the one with the best chance of securing those outcomes.”
OurCoop was launched in January following a merger of Central Co-op, Midcounties Co-op and Chelmsford Star. It currently operates around 500 food stores. Co-op Group operates around 2,300 stores as well as owning Co-op Wholesale, the business previously known as Nisa. Southern operates around 175 food stores.
The proposed merger of Southern Co-op and the Co-operative Group was announced on 8 April. The merger would create an organisation with sales of circa £11.5bn.
OurCoop did not share any further details of its plans, however a spokeswoman told The Grocer: “OurCoop and Southern Co-operative have worked closely together for years, including saving members around £29m through shared procurement. Our president and CEO wrote to Southern’s chair in that spirit – to recognise that partnership, offer our insights and experience from forming OurCoop earlier this year and share our views on how we maintain a thriving independent co-operative heritage.”
No comments yet