Members of farmers’ co-op Bata reject demutualisation plan

'The vote shows the power of co-operative governance, ensuring the future of Bata remains co-operative to serve the needs of its 3,000 owner members'

Members of the Brandsby Agricultural Trading Association (Bata), a Yorkshire-based farmers’ co-op, voted against plans to demutualise on Tuesday (15 August).

The management had announced plans to turn the co-op into a private company, citing concerns over its ability to raise capital. But this was followed by reports of “fractious” meetings in the week before the crunch vote, with a group of members organising against the move.

In a statement after the vote, Bata said: “Although the voting threshold was not reached, 66.16% of
voters voted in favour of the proposal leaving a minority of 33.84% against. This demonstrated that
it was a majority of members of Bata who voted yes.

“It was confirmed by the company secretary that Bata has 2,500 eligible voting members, and that the turnout was 53.36%. Despite not reaching the society rule of a 75% majority to pass the motion it remained clear in the board’s strategy to continue to address changes in line with its business objective to create even further member value
and improved resilience for all the membership.

“A further special members meeting was announced by the company secretary directly after the meeting to address key points in its continued steps to move the business successfully forward. The details of this meeting will be announced in due course.

“The dhairman of the meeting wishes to thank everybody that has been involved in this business process so far and in particular all the members who we work tirelessly for as a whole in a challenging industry.”

The group opposing demutualisation includes former chair Charles Brader, who argued that the co-op’s assets meant it would be able to raise capital, and voiced concerns that member rights would be weakened by demutualisation.

After the vote, a spokesperson for the opposition group told York Press: “At a special members’ meeting held in York … voting took place on the first part of a proposal by the current Bata board to convert Bata into a private company limited by shares.

Related: Demutualisation plan sparks member row at Yorkshire agri co-op

“After a substantive campaign by members against the resolution for conversion, the result of the vote did not give the required number of votes to allow the process to continue.

“An unscheduled vote then took place at the meeting to cancel the second stage voting and terminate the process completely. There was acceptance by board members present that the issue had not been well handled or sufficient justification given to the members.

“Andrew Richardson, the chief executive and secretary announced that the board would now be considering their future strategy and the composition of the board.”

Brader told Farmers’ Weekly: “We’re very pleased with the result, but there are other issues going forward which need to be addressed.

“This ill-judged project has, in my opinion, caused damage to Bata both financially and reputationally and we’re going to try our very hardest to repair it and welcome back the 500 members that we have lost and to recruit new membership.”

Emma Laycock, member services lead and head of advice at Co-operatives UK, said: “We are pleased to see members were given the opportunity to follow democratic processes in response to recent moves by the BATA board to change its ownership.

“The result of the vote shows the power of co-operative governance, ensuring the future of Bata remains co-operative to serve the needs of its 3,000 owner members. We will continue to reach out to representatives to offer our support during this challenging time for a historic business.”

The vote preserves a longstanding name in the UK co-op movement. Now with just under 3,000 members eligible to vote, Bata’s activities include livestock feed manufacturing and storage, fuel, LPG and heating services, agricultural supplies, deliveries to farmers, smallholders and home owners, and 11 Country Stores.

Registered under the Co-operative and Community Benefit Societies Act, its board of non-executive directors are elected by share members at the AGM. Day-to-day activity is delegated by the directors to a management team, with any surplus profits are in part retained for future investment and distributed to members as interest and dividend.

The row follows much debate in the UK and abroad over the demutualisation risk to co-ops, and the problems the sector experiences in raising capital. High-profile cases include the sale of iconic Canadian outdoor retailer Mountain Equipment Co-op to a US investment firm in 2020, and the failed bid to sell UK mutual LV= to US investment firm Bain Capital in 2021.

Such problems have helped spur moves to reform the regulatory environment for co-ops and mutuals around the world, including a modernisation of co-op law in Australia which allows the sector to use new capital instruments, similar to those developed for building societies and mutual insurers in the UK.

In the UK, MPs recently passed the Co-operatives, Mutuals and Friendly Societies Bill – introduced initially as a private members Bill by Labour/Co-op MP Mark Hendrick – which has provisions address problems with the types of share capital issued by co-operatives.

  • This story was updated on 17 August to include a statement from Bata
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