Retail co-ops and the tricky world of ethical consumption

Interview with Rob Harrison, director of Ethical Consumer

How do co-ops fit in with ethical consumption?

Ethical Consumer did a research project specifically related to this with Co-operatives UK, about 10 years ago, which resulted in the book, People Over Capital: The Co-operative Alternative to Capitalism. What we found at that time was that worker co-ops were most sensitive to sustainability issues, with consumer co-ops second, though not in every case. And then agricultural producers are less likely to display sector-leading sustainability. These are just general characteristics, and there’s more research to be done.

But in the UK at the time, there were clearly strong worker co-op movements around sustainable consumption, with Suma and others acting as essential key players in that space.

Related: Co-ops, consumers and the ethical tug of war

What you have in capitalism are very rapacious businesses like Amazon whose job is to maximise their externality and reduce costs every turn. Co-ops are always better than that type of business. Then you find really radical businesses who just want to do something different – and co-ops are sometimes there but not always at the really radical end. Co-ops are never profit maximising but they’re sometimes not at the cutting edge of doing ethical stuff, although worker co-ops were often in this vanguard area. 

The big consumer co-ops really identified with Fairtrade and stepped up to the plate on that one – not least because the supply chain was largely co-operative; it wasn’t just a label, it very much spoke to the co-op model. 

Against this backdrop, lots of other businesses, like Sainsbury’s, were looking at ethics well. Over the last 20 or 30 years, the retail societies were probably slower to start and I think other businesses were slightly ahead of them right at the beginning, in the 90s. But then co-ops seized a determination to lead the field and drove that up until everything went a bit pear-shaped in 2013, when there was a lot of rebuilding.

But there’s still an understanding for the retail societies that they need to keep reinventing themselves and at the moment, leaving the ethics behind and competing on price with the likes of Asda and Lidl just isn’t practical for them. [Ethics] speak to the heritage and the identity of co-operation, which makes that work. 

Is there something intrinsic to the co-op model that helps ethical consumption?

Having other voices in the room is good, as long they’re not too closely managed – a co-op needs to be open to the criticisms of its members, not be defensive. It needs to welcome them. If consumer co-ops can maintain active participation of ordinary people – a tricky thing in a big organisation – this can make them naturally more responsive to societal concerns.

A co-op is not just a board of directors that flies around everywhere and only ever talks to people with private jets. Members call them out. 

And I think there is some localisation of that voice as well – regional societies are going to be good at that because they are of themselves not national. 

How do co-ops demonstrate this difference against their competitors?

We’ve been involved in some conversations with the movement about whether co-ops need some kind of ethical certification scheme. I think co-ops have seen B Corporations as a dynamic new player in the room, and they are wondering how to situate themselves in relation to that. What B Corporation does is create a public-facing argument as to why this type of business is a bit different and publicly promotes its identity as one that is ethical. We’ve been involved in some discussions about whether there’s some kind of solution to that involving special co-op labels.

It’s very difficult to generalise about co ops as they are many and varied, but at the core, almost all of them are what we would call mission-oriented. They have been put together to do something other than raise money. 

Co-ops that do child care or look after refugees, for example, don’t necessarily have to articulate their ethical position to persuade the community they are working with [in the same way as] retail co-ops that are competing in the marketplace with for-profit businesses. 

Twenty years ago, your business would stand out if you displayed your ethics, but now we’re in a place where ethical standards are expected. One area co-ops are really leading on is tax conduct – they’re good at not avoiding tax, while avoidance structures can be seen across the mainstream retail sector.

Retail co-ops have done well on issues like Fairtrade and modern slavery – what ethical issues do you think they still have to resolve?

Food supply chains are broken. We’re in a world where food is too cheap and the costs are being pushed onto the producers, the workers or the environment. These are system errors; it’s very difficult for single businesses to fix them. 

At Ethical Consumer, if we look down some supply chains, we see problematic workers’ rights issues with some of the commodities. They’ve done well with the Fairtrade mechanism, but it only exists in a few commodities and there are lots of places where Fairtrade can’t help you. We have a project at Ethical Consumer on fruit and veg coming from southern Spain. There’s masses of undocumented migrant labour there with very poor working conditions. It’s not like the co-ops don’t care, it’s just that they have to buy their food from the same place as everyone else and they can’t create vertical systems that are perfect on their own.

But co-ops 100 years ago did have their own supply chains – their own ships and farms and suppliers – and now there are people innovating around localising food supply chains more, which would speak to some of the regional society models. I think there’s something to explore there. 

There are lots of other areas like carbon and plastics that co-ops are doing a lot of work on [but] these are also system-level issues – it’s not fair to say that co-ops haven’t fixed this, because no one has. These are very difficult problems of late capitalism [and] hard to fix without products becoming more expensive; and if it becomes too expensive, you lose your customers to a cheaper alternative, either because customers are broke or because the narrative is difficult. 

Retail co-ops have been working with companies like Amazon, Deliveroo and Uber on home deliveries. Is this a problem? 

Those organisations offer scale and affordability. But I’m concerned about their working with Amazon, because I think Amazon could hollow them out from inside by taking over more and more of their services. There is a danger with collaborating with aggressive buyers in the market in that you end up with much less than you started with.

Related: Co-op Group draws flak over new partnership with Amazon

But the co-operative model is super resilient and has been around for a long time – longer than most of the other players – and it does have the capacity to reinvent itself. We’re in a time of massive change and upheaval, but so long as they can keep listening to their members and stay open to critical voices, the model does have resilience built into it. 

Another element of it is massive customer loyalty, going back generations. That unusual loyalty that co-ops have with their members gives them even more resilience.