Tuesday, 2 April 2013

Event hears from company that shares its profits with customers



The CEO of a company that refunds its customers if it makes too much money addressed around 100 like-minded business owners in Birmingham last week.
 
Ben Reid, chief executive of The Midcounties Co-operative, was the keynote speaker at a networking lunch thrown by Co-operatives West Midlands at the Council House.

Mr Reid – who leads the largest independent co-operative in the UK, with almost 9,000 colleagues spread across around 450 sites in businesses as diverse as food, travel, pharmacy, funeral care, child care, post offices and energy – was invited to talk about the state of the co-operative economy in 2013.

And he was at pains to remind delegates that although he was chief executive of a company with gross sales of £738 million, it is a business owned by its customers.

Mr Reid said he used the mnemonic 'Co-operative DOES' to explain to people what co-ops stand for: Democracy, Openness, Equality and Social responsibility.

Using one part of the business – Co-operative Energy – to illustrate the point, he said: “Customers are tired of the antics of the 'Big Six' energy providers.

“We only have one tariff, and if we make more money than we planned – because of situations like the cold March we're experiencing – we give the excess back to our customers in the form of a dividend.

“When energy companies put their prices up by about seven to 11 percent in September, we brought ours down by two percent, because the cost of the product had gone down, and we held that tariff throughout the winer.

“We could have put our prices up by six percent and still been the hero, but we're not about making 'super profits', and that gives our customers peace of mind.”

Launched in May 2011, Co-operative Energy now has 125,000 customers, and employs 80 people at its Warwickshire HQ.

“Co-operative Energy is a commercial success, and underlines the fact that the co-operative economy is thriving,” said Mr Reid.

And in a week where George Osborne's Budget had promised a string of measures to get Britain building, and people buying houses again, Carl Taylor, chief executive of Birmingham Co-operative Housing Services, took the floor to offer an alternative.

“There are not enough houses in this country, and when we do have houses they are often in a poor condition,” he said.

“Co-operative housing offers a solution. In Europe, ten percent of people live in housing co-ops; in Germany, 4.6 million people are a member of a housing co-operative.

Mr Taylor said that in the West Midlands this year, BCHS was developing 206 new homes, which will accommodate over 820 people, across five sites.

The developments – which will be among the most environmentally friendly in the region – are supporting 120 jobs in the building trade, and represent a £27.6 million investment into the local economy.

“We think co-operative housing is a better form of housing,” he said.

Nick Matthews, chairman of Co-operatives West Midlands, added: “Since 2008 the number of co-operative businesses in the West Midlands has increased by 23 percent to over 500, with a combined turnover of £5 billion.”

For more information about starting a co-operative business, log on to www.cooperatives-wm.coop

No comments: