Co-ops show that other side of the food chain can be ‘greened’ too

Conteiners for raw food and liquids can help reduce waste and plastic packaging in the retailing sector. [SHUTTERSTOCk]

This article is part of our special report Brave new food world.

Focusing the debate over the new EU food policy only on greening agricultural production may detract from the other side of the food chain which has the potential to become more sustainable, as the experience of retailing co-operatives shows.

The new Farm to Fork (F2F) Strategy for sustainable food announced by President-elect Ursula von der Leyen will cover every step in the food supply chain, from production to consumption, feeding into the EU circular economy objectives.

In a truly integrated common food policy, no component across the entire food chain should be ignored or left out, as it won’t involve only low-carbon food production but also food safety, animal and plant health and consumer information.

This is not entirely new and certain sectors are already developing best practices in this regard, sometimes anticipating topics now high on the EU policy agenda.

It is the case for consumer co-operatives or co-ops, whose economic model has its roots in the British Co-operative movement of the 19th century but which can give us a taste of what the retailing sector will look like in the future.

The consumer co-operative model is not an old-fashioned concept, as such retailers are widespread throughout Europe with a variety of store networks that ranges from hypermarkets to local outlets.

Despite the fact the model dates from long ago, it has recently tended to be confused with the newer concept of the sharing economy.

“But it is fundamentally different,” explained Juhani Ilmola, director of consumer co-op S-Group with a market presence of 46% in Finland food retail and a turnover of €11.5 billion in 2018.

“Whilst in a co-operative enterprise its users are also its owners, in sharing platforms a few founders receive all added-value,” he told EURACTIV, adding that in a co-operative, members have direct control over the processes and the goals of the enterprise.

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Pioneering the change

Traceability and the implementation of the circular economy’s main principles in food supply are where co-ops already started working in line with EU ambition.

EURACTIV spoke with Maura Latini, Director-General of Coop Italia which counts 8 million members and have a 20% market share in the Italian retailing market, about these best practices.

She mentioned that, in the early 2000s, Coop Italy was the first Italian retailer to certify the origin and traceability of some supply chains considered at food fraud risk, like oil, tomato sauce, eggs and milk.

“Since October 2013, considering the greater importance of online services, Coop has launched a website where consumers can verify, for each product, the origin of the main ingredients of products,” Latini added

But the potential of innovation does not stop at digital traceability. “Coop Italy has not only pioneered organic and fairtrade products but also reduced the use of chemicals and the consumption of natural resources thanks to the application of new technologies,” she added.

In Wojciechowski’s mission letter, von der Leyen explicitly asked the incoming Agriculture Commissioner to pay particular attention to boosting EU organic production, while the request to Health Commissioner Stella Kyriakides was to reduce of pesticide use.

New challenges for retailers also come from the rising threat of anti-microbial resistance (AMR), which was listed by John F. Ryan, Director of the Unit Public Health at DG Sante, as a top priority in Kyriakides’ mandate together with the EU cancer plan.

“We are strongly involved in raising animal welfare standards in all its meat supply chains, which is also a crucial step to foster a reduced and responsible use of antimicrobials which is urgently needed in the fight against AMR,” she concluded.

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Lack of EU framework

In September, Polish MEP Leszek Miller filed a written question to the Commission asking to pay particular attention to the development of cooperatives and other forms of social enterprise in the member states.

Contacted by EURACTIV, he said that within the EU there is a huge variety of national laws on cooperatives. “This significantly hinders the smooth functioning of social enterprises within the EU Single Market,” he said.

According to him, the Commission should take “bold and more far-reaching legislative measures” that would help to harmonise national rules both in terms of definition and understanding of the broad concept of social enterprise.

In 2013 a Working Group of Cooperatives was set out by the Commission to asses the specific needs of cooperative enterprises, while discussions with cooperative continue in the frame of the expert group on social economy and social enterprises (GECES).

Upon the recommendations of the Working Group, two pilot projects are being implemented and a new call for proposal for a second wave of projects has been launched and is currently under evaluation, the European Commission informed EURACTIV.

“Another important aspect, that in my opinion that EU legislation would help to achieve is the improvement of the social enterprises access to finance and EU funding, as well strengthening the social economy’s financial ecosystem,” Miller added.

According to Russel Gill, head of Co-operative & Local Engagement at the UK Co-operative Group, co-ops don’t have or have limited access to venture capital on the capital markets, as they primarily depend on their own member capital as well as a member and bank loan finance, in order to satisfy the specific member needs.

“Also, they are often confronted with poor knowledge about their business model by private investors,” he added.

Their structural difference, combined with strict governance rules, make them less attractive to financial investors, resulting in greater difficulties to access capital. “An educational, legislative and financial change needs in order for co-operatives to thrive,” Gill said.

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