One Sunday evening in spring 1920, 173 workers in the Argentine city of Bahía Blanca decided to form a cooperative to combat the growing spread of bakery cartels. Since then, the Cooperativa Obrera (“workers’ cooperative”) has grown to become the largest consumer cooperative in Argentina and the second-largest in Latin America, with 107 stores in 52 cities, 4,400 employees and more than 1,300,000 members.

The cooperative’s founders were mostly railroad workers who wanted to reduce the price of bread, a vital staple in the family diet. Should they rent a bakery in order to immediately begin producing their own bread, or look to the future and build their own? In the end, they opted to build their own bakery, which opened on 1 May, 1922. The pioneers went on to open a warehouse, expanding their ability to regulate the prices of other family essentials. In 1936, the cooperative set up its first store outside Bahía Blanca, and continued to expand in scope and geographic reach over the following decades, weathering the economic crises in the 1950s and late 1990s.

Since its beginnings, Cooperativa Obrera has followed a policy of social responsibility, opening stores in underserved areas, facilitating membership and using products to improve consumer health. In a hugely concentrated retail sector (six retailers have 80% of the market share), the cooperative has managed to carve out 2.7% of national market share, even though it has stores in just four provinces, and is not present in large cities. According to Mariano Glas, the cooperative’s Supermarket Manager, society needs to understand that “the cooperative sector is not a marginal sector, we are enterprises of people, not capital. Our most important role is to serve our members, not just generate profit.”

Cooperativa Obrera’s supermarkets are mainly located in towns where the average population is less than 50,000, where services are needed. The cooperative looks for new locations on the basis of requests from residents, municipal authorities and unions, and in recent years from small supermarket owners whose ability to stay afloat has been threatened by difficult market conditions. Cooperativa Obrera enters into 40-year concession agreements with these small supermarkets. The owners receive an initial payment and then a percentage of the supermarket’s turnover on a monthly basis, ensuring a permanent source of income for their families, and employment continuity for their staff.

Since 2005, the cooperative has also been carrying out a sustained campaign to increase membership, and 98.3% of sales are now to members. The membership process has been so simplified that all consumers have to do is present their national ID at any cash register and pay 1 peso (US$0.12) as initial capital. Members benefit from advantages like promotions and reduced prices. The cooperative’s surplus is distributed to its members, in proportion to purchases made. In 2014, 1,317,623 members received a total refund of 84,522,417 million pesos (US$10,358,000).

Members can also participate at no cost in the various educational, cultural and recreational activities organized by the cooperative. “The cooperative’s social and cultural activities put into practice its status as a social enterprise,” says Mariano, “demonstrating that the distribution of food in the hands of consumers, through a consumer cooperative, is highly beneficial to the whole community.”

The supermarket has developed its own brands, providing a range of basic items of high quality at competitive prices. Most of the products are produced by Argentine companies, so the brands support the domestic economy, and the cooperative also helps small and medium producers, giving them the opportunity to sell their products through the stores or through the creation of their own brands. Local producers are particularly favoured for the supply of fruits and vegetables.

The cooperative runs campaigns to encourage the consumption of five different colours of fruits and vegetables every day, and has also developed a series of functional foods to help improve consumer health. Cooperativa Obrera currently has 46 products in its Ecoop line, which follow public health policies and the World Health Organization guidelines. The line includes high-oleic sunflower oil, with similar properties to olive oil but five times cheaper, and, coming full circle from the cooperative’s origins as a railroad-worker-run bakery, “Pan Ecoop”, Argentina’s first bread fortified with Omega 3, 6 and 9 fatty acids and phytosterols, distributed at the same price as ordinary bread.

 

Story originally published in 2014 World Co-operative Monitor.