Finland is the most co-operative country in the world, members of the Scottish Parliament (MSP) were told.
Kari Huhtala, director of co-operation at Pellervo, the Finnish co-operative trade association, travelled to Scotland in February to meet cross-party group on co-operatives. The event was organised in conjunction with Nordic Horizons and sponsored by Willie Coffey MSP.
Like Scotland, Finland has a long co-op history. Co-operatives started in Finland more than 100 years ago when the country was under Russian administration. The first Co-operative Act was passed in 1901 when around 90% of the population was involved in agriculture.
“Intellectuals discovered that co-operation was a good way to unite people. In those times Finland was very poor – large companies were able to get the best profits,” said Mr Huhtala.
“In rural areas there were hardly any shops available and people realised we needed to unite our power and establish a shop of our own.
“In terms of dairy co-operation, there were big challenges to sell the milk to the market so the co-operative took care of this process.”
Finland developed an economy based on mutuality that managed to survive World War II and, years later, the deep depression which hit the country in the early 1990s after exports to the Soviet Union collapsed.
“Co-operation was present in my society,” said Mr Huhtala. “My father was a farmer. He was a member of four different co-ops.
“I was raised in the most co-operative region of the world’s most co-operative country.”
While it has a similar population and GDP to Scotland, Finland is home to 5,100 co-operatives. By contrast, Scotland has only around 600 co-operatives. Moreover, 84% of the adult population are members of at least one co-op.
But, co-operation still does not figure outside the shadows of public discussion, warns Mr Huhtala.
“It is not studied in schools or universities, it is not talked about, it is not interesting for some reason,” he said. “These are our mutual challenges.
Collective purchasing: what lessons can co-ops learn from Finland?
“We have more co-ops, more members and have worked longer on these questions – and we can see in Finland that even decision makers and politicians have seen that co-ops are a good option.”
Looking at Scotland, Mr Huhtala told MSPs: “You have fewer co-ops, but there is much potential in your country for co-ops because the environment is about the same.”
Co-operatives are now present in most sectors of the Finnish economy. An organisation with 18 employees, Pellervo works to promote the movement and provide training for co-ops and their members.
“Co-operation in Finland has always been bottom-up. We still have local stores where you can go shopping and farms in Lapland,” added Mr Huhtala.
Most people are members of consumer co-ops and co-operative banks, but co-ops are also popular in insurance. Farmer co-ops are getting smaller in terms of membership but their turnover continues to grow.
One of the biggest co-ops in Finland is Mersä Group, a forest co-op with 120,000 members and a turnover of €5bn. It produces tissue, kitchen towels and wood products.
Another big co-operative is Valio Group, which includes eight regional dairy co-ops with 8,000 milk producers. The co-op has a turnover of €2bn and subsidiaries in five countries, exporting to 100 states.
Most large co-ops have a similar model with primary co-operatives controlling limited companies that are listed on the stock market. This model answers the co-ops’ need for capital while retaining control in the hands of the primary co-operatives, said Mr Huhtala.
The country’s two co-operative banking groups account for 40% of the deposits.
I believe in co-operation, it is a modern model and a model for the future
Also a large co-operative, S-Group consists of 20 independent, regional co-operatives. The group has a market share of 44% in terms of daily goods and is the biggest hotel and restaurant owner in Finland and the second largest petrol station owner.
“Co-operation is growing again. There’s no limit where you can establish a co-operative,” said Mr Huhtala.
“Always in business some thrive, some survive and some die. There are reasons for this. If you do not change your culture under changing conditions you will fade away, this nearly happened to co-operatives during recession in early 1990s.
“Today if you look at who is investing in Finland, quite often they are co-ops. Mersä Group a year ago built a €1bn forest plant. It could have built it somewhere else.
“I believe in co-operation, it is a modern model and a model for the future. In Finland we do not have any Walmarts, but we have co-ops.”
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