Chapter X - Changing Consumption Patterns

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   This document has been made available in electronic format
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  Contribution of Co-operative Enterprises and the International
     Co-operative Movement to Implementation of UN AGENDA 21:
       Programme of Action for Sustainable Development 
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                     Prepared jointly by
             the International Co-operative Alliance
                              and 
                      the United Nations
  Department for Policy Coordination and Sustainable Development

                 Geneva and New York, April 1995

        For information purposes only. Not an official
   document of the United Nations and not officially edited.


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                         CHAPTER X
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X. CHANGING CONSUMPTION PATTERNS (CHAPTER 4)

A. Special significance in urban areas

    Agenda 21 identifies inappropriate consumption patterns as
a major source of pressure upon the natural environment, and
proposes action to adjust these patterns. In Principle 8 of the
Rio Declaration the elimination of unsustainable patterns of both
production and consumption are identified.

    The relevance of changes in entrepreneurial consumption in
rural regions have been explored in previous chapters. Changes
in household and individual final consumption are significant in
rural regions also, but this is true particularly of the advanced
market economies, where rural populations now constitute only a
small proportion of the total.  In the rural regions of
developing market economies a high proportion of consumption is
still subsistence or derived from the local economy. Certainly,
certain aspects of this consumption are of relevance to the task
of achieving sustainable development: one area being that of fuel
and energy consumption and its impact upon forest and hence water
resources. In urban areas of developed and developing market
economies intervention in patterns of household and individual
consumption is of the greatest relevance to the task of achieving
sustainable development, and it is this area which will be
examined in the present chapter.

    Consequently, the types of co-operative enterprise of the
greatest significance are consumer-owned wholesale and retail co-
operatives, in respect to the whole range of consumer goods and
services.  These and other types of co-operative (financial,
health, utility and infrastructure, housing) are significant
primarily in respect to their consumption of fuel and energy, and
their production of waste. These matters are dealt with primarily
in Chapters XI and particularly XII.

B.  The contribution of consumer-owned wholesale and retail
    distribution co-operatives

    Consumer co-operatives are business enterprises engaged in
the wholesale and retail distribution of commodities and services
for use in the household sector (that is in the micro-enterprises
comprised by households) and for final consumption.   Their
owners are the members, who are the customers, or users of the
co-operative.

    Because they own the business enterprise, customer-members
are able to determine enterprise goals and practices, including
the choice of goods and services being provided. They are able
to indicate criteria for the formulation of guidelines for the
specifications made by the enterprise to its suppliers (which to
an increasingly extent are subsidiaries of the wholesale or
retail co-operative). Consequently, to the extent that the
citizens who are members and owners are convinced of the
importance of environmentally-friendly consumption behaviour,
this can be immediately translated into the business operations
of their enterprise.

    Indeed the earliest co-operative enterprises and movements
were established specifically for the purpose of supplying to
members "pure and unadulterated goods". The 28 founders of the
modern co-operative movement, the Rochdale Pioneers, established
in 1844 the first consumer co-operative enterprise for this
purpose.

    This situation is of major significance, given the dimensions
of the consumer co-operative movement. In developed market
economies high proportions of citizens are members of consumer
co-operatives. For example, in December 1991 in the European
Community, as well as in the Nordic countries, Switzerland and
the former Czechoslovakia, consumer co-operatives had 21.6
household members and 393,000 employees and a turnover during
1991 of ECU 45,639 million. They accounted for over half the
retail food sales in Switzerland, 34 per cent in Denmark and 30
per cent in Finland.

    In developing market economies market shares of consumer co-
operatives are less, but their potential is equally great.  In
transitional economies substantial shares of wholesale and retail
distribution were accounted for by entities described as "co-
operatives", but which were in fact parastatal agencies or state-
owned agencies. Their business goals and practices, including the
schedule of goods and services they provided to the consumer,
were not in fact determined by consumer members, but rather by
central planning agencies. They acted as monopolies, supplying
most of the population, but not responsible to them.  Hence these
entities cannot be regarded as genuine co-operative business
enterprises.

    In many of the transitional countries these systems are being
privatized, in part to genuine co-operatives, but also to private
investor-owned enterprises not directly responsive to customers. 
Where fully privatized they have a smaller but still significant
market share in retail distribution of goods and services. In
some countries where transition is difficult they retain
considerable significance still. Their potential for promoting
and facilitating a shift in consumption patterns is very large.

C. Examples of the contributions of consumer co-operatives
   to a shift in consumption patterns

   It is evident that co-operative enterprises are very
significant elements in retail distribution, and in the
associated manufacturing, processing, wholesaling and marketing
operations. Whether or not this market significance is, or can
be, translated into a real contribution to bringing about a
change in consumption patterns conducive to sustainable forms of
development depends on a number of factors. First, upon the
levels of awareness and feelings of responsibility of the public,
and specifically of that part which is associated with the co-
operative through membership or employment. It is members who
determine business goals and practices, and determine changes in
the products retailed and in relevant operational practices. 
However, because consumer co-operatives collaborate within their
own consumer co-operative federations, and these form part of the
broader national and international co-operative movement, they
are subject to influences from other parts of the movement, and
also from countries where environmental awareness and activity
is further developed. This influence can be diffused through the
consumer co-operative to its members.

    In developed market economies in recent years a considerable
proportion of major retailers have taken an interest in
environmentally appropriate operation (see also Chap. I, section
C.2(d)). Consumer co-operatives have formed part of this trend,
and in many countries have been in the forefront. For example,
in Canada in 1989 consumer co-operatives had already replaced
disposable with reusable containers; and most office paper is
recycled. 110/  Federated Co-operatives Ltd, which serves as a
central supplier to its 330 consumer co-operative members in
western Canada, had by 1992 appointed a member of senior
management as an environmental coordinator, and environmental
contact persons had been identified in every area of the co-
operative's business activities. A programme called "Responsible
Choices" provided members with up-to-date information on goods
that were friendly to the environment and to human health. 111/ 

   In the United Kingdom in 1989, an independent survey of the
six multiple retailers, which between them controlled 70 percent
of retail food business, placed consumer co-operatives, which
control about 12.5 per cent of business, second on environmental
matters. This favourable achievement had resulted from the
comprehensive approach adopted by the movement, which had looked
at all aspects of wholesaling and retailing, and not just single
issues. Environmental factors were considered in relation to the
entire product life cycle, that is from production and its
packaging through distribution and use to ultimate disposal.

   The main vehicle for the United Kingdom consumer movements'
environmental strategy had been its own brand products - which
in 1990 comprised almost 3,000 different varieties and accounted
for more than a third of co-operative food sales (that is about
4 per cent of national sales).  CFCs had been removed; chlorine-
bleached products had been substituted with oxygen-bleached or
non-bleached products; phosphate-free products were being
introduced; petroleum-based products were being replaced by
vegetable-based products; PVC packaging was being reduced; 
recyclable materials were used wherever possible; recycling of
bottles was being promoted and facilitated; toiletry products
were not tested on animals.  Clear, informative labelling
includes information on first aid, detailed ingredients and
degree of animal testing. 112/

    In Denmark the consumer co-operative organization FDB
informed ICA in 1989 that it used less PVC and chlorine-bleached
paper and cardboard; its own brand aerosols were CFC-free; and
foam plastic packaging had been produced without the use of CFCs. 
In 1987 it had launched a project to reduce the amount of
packaging used for its products and to substitute ecologically
undesirable materials with safer ones.   All products were
examined for over-packaging and concentrated, condensed and
compressed products were stocked.  Recycled materials were used
in some packaging. 113/  In 1992 FDB reported that its "Green
Campaign" would continue to promote environmentally friendly
products and create awareness on environmental issues. 114/

    The programme for the environment adopted in Sweden in May
1990 by the consumer co-operative movement set a number of long-
term goals. Environmental, health and ethical matters were
considered to be interlinked and essential components of the
programme. Users of co-operative retail stores should be able to
feel certain that they were being offered the best possible
selection of merchandise from an environmental point of view. 
Production, including that in the consumer co-operative
movement's own factories, warehousing, transportation, store
equipment and waste handling were also to be as well adapted as
possible to environmental needs. Education and provision of
information to members was considered an integral part of the
programme.

   The Swedish consumer co-operative movement had already
introduced its own symbol for environmentally friendly products;
had offered environmentally friendly paper carrier bags since
1970; had introduced a number of environmentally friendly goods,
such as non-chlorine bleached paper products and nappies,
batteries which did not contain mercury, and organically
cultivated vegetables; had introduced retail packs meeting
stringent environmental requirements; and had been selling
environmentally friendly detergents for people with allergy
problems since the 1960s. Certain of the consumer co-operative
movements operating at the provincial level no longer used
plastic bottles for beverages. 115/

   In 1993 Co-op Suisse reported that it was committed to
reducing packaging, saving energy and providing environmental
education to its staff and its consumers. Co-op Suisse had 13.2
per cent of national retail distribution. It included 1,305,000
million households as members.  116/   

   In 1993 the Finnish Consumer Co-operative Society held a
symposium attended by all consumer co-operative enterprises to
discuss alternative solutions to the waste disposal problems of
retail enterprises. 117/ 

    In 1993 the Japanese Consumers' Co-operative Union, which has
26 per cent of the country's households as its members, was
finalizing a three year plan to carry out environmental policies
which would act as a guideline for the plans of individual co-
operative enterprises. The plan had four themes:  to change
members' lifestyles; to review all merchandise retailed through
co-operative enterprises with respect to its impact on the
environment; to orient all business activity toward environmental
conservation; and to lay the foundations for this movement
through education and financing.

   To be included in the category of environmentally-friendly
products, a product had to meet at least one of three conditions: 
it did not impose undue strain on the environment; recycling was
possible;  energy and natural resources were saved.  Although
some of the primary retail co-operatives had developed and sold
environmentally friendly products for many years previously, the
Union considered it appropriate, in view of the surge of public
awareness of environmental issues, to dedicate itself fully at
the national level to the development and supply of such
products. These  would bear a standardized symbol.  By March 1991
it was expected to have three hundred products within this
environmental line.  A number of innovations were introduced as
part of this strategy: for example in February 1990 the Union was
the first retailer in Japan to market a "stay-on-tab" can for
beverages, as the "pull-type tab" previously used throughout the
country had been found to be dangerous to some animals, and
responsible for much littering. 118/ 

    The Kanagawa co-operative enterprise, one of the largest of
the consumer co-operatives organized at the sub-regional
(prefectural) level, had set up a life-cycle analysis system to
review how its products affected the environment and how negative
impact could be reduced. It had adopted a comprehensive ecology
action programme: its operations had been adapted, recycling
activities introduced, environmental audits undertaken and
production methods adjusted by agricultural suppliers.119/ 

   The efforts of the consumer co-operative movement in Japan are
complemented by the agricultural co-operative movement, of which
almost all rural households are members, and which is concerned
not only with production and distribution, but the provision of
a wide range of services to rural populations. Thus, as part of
its strategy to ensure sustainable agriculture and forestry and
rural regions, the National Federation of Agricultural Co-
operative Associations (ZEN-NOH) proposes the establishment of
a system for the distribution of farm products which have been
produced in accordance with agricultural methods designed to
protect the environment, as well as the simplification of
distribution standards and packaging for farm products. 120/

    Early in 1994 ZEN-NOH reported that it was continuing its
activities to raise environmental awareness with a poster
campaign "Only One Earth".  It was committed to saving energy,
reducing packaging and collecting recyclable material in its "A-
COOP" stores.   A nationwide survey of 1,681 such stores found
that 80 per cent collected milk cartons, 30 per cent collected
styrofoam trays and 20 per cent sold unpackaged commodities. 121/

    However, some consumer co-operatives have found that not all
their customers have been willing to pay higher prices for
environmentally-friendly products. For example, in the
Netherlands, where legislation protecting water in canals and
lakes had already caused higher costs in the co-operative
marketing of dairy products, dairy co-operatives introduced milk
in glass bottles instead of cartons, produced by cows with lower
levels of chemicals in their feed and less fertilizers in their
pastures.  Consumers rejected the higher priced organic line.
122/

    In 1993 the Danish Federation of Consumer Co-operatives (FDB)
noted that it had not necessarily been a commercially feasible
venture to introduce "green" marketing strategies, but there was
no doubt that they had enhanced the image of FDB. 123/ Consumer
co-operatives are able to bring substantial pressure upon
producers.   Where producers are themselves organized co-
operatively, the response is frequently rapid and substantial.
For example, in Denmark in 1990 25 per cent of milk sold by food
retail co-operative enterprises originates from farms which do
not use industrial fertilizers or chemical pesticides.  
Moreover, the price of the organically produced milk was about
two Danish Krone higher than for non-organically produced milk.
124/

    The Swedish co-operative wholesale and retail organization
Kooperativa Forbundet (KF) stated in 1989 that it was
particularly well-disposed to introduce more environmentally-
friendly products, and to remove those causing environmental
damage, because it had its own manufacturing enterprises which
provided its retail stores with a significant proportion of
goods.  These enterprises were making determined efforts to
increase the acceptability of such products.125/

    One element of the environmental programme of the Finnish co-
operative EKA group is to encourage suppliers to develop
environmentally-friendly products and operations.   It maintains
a dialogue with manufacturers and suppliers to ensure that
complete information is given on product labels. 126/

    Because of the large dimensions of the consumer co-operative
movement, and their control over wholesale and retail enterprise
outlets, members are in aggregate able to act as a major lobby,
pressuring suppliers to emphasize environmentally-friendly
operations and production.

    Co-operative wholesale and retail enterprises in many
developed market economies have adopted their own symbols
informing customers that the product is environmentally friendly. 
However, both co-operative and non-co-operative retailers have
their own symbols, and the consumer co-operative movement is
lobbying with Governments to introduce uniform criteria defining
the degree of "greenness" in order to prevent the inappropriate
use of invented symbols, likely to mislead customers. In the
United Kingdom the Co-operative Wholesale Society Ltd. has given
considerable attention to this matter. 127/

    Provision of information to consumers concerning the
availability of environmentally appropriate goods is an important
activity.  In 1992 in the United States the Co-op America
Foundation, based in Washington D.C., established a special
division "Co-op America" in order to help members to make
purchases and investments in socially and environmentally
responsible businesses.  It publishes annually its "National
Green Pages". 128/

                          NOTES
                          -----
110/ Review of International Co-operation, vol. 83, No. 2
     (1990), p. 80.
111/ ICA News, No. 3, 1992, p. 14.
112/ Review of International Co-operation, vol. 83, No. 4
     (1990), pp. 50-51.
113/ Review of International Co-operation, vol. 83, No. 2
     (1990), p. 85.
114/ FDB Annual report and Accounts, 1992.
115/ Review of International Co-operation, vol. 83, No. 2
     (1990), p. 91;  No. 4 (1990), pp. 46-7.
116/ Coop Suisse, Annual Report, 1993.
117/ EUREKA (Helsink), 11 March 1993.
118/ Review of International Co-operation, vol. 85, No. 4
     (1992), pp. 145-146.
119/ Ibid., p. 146.
120/ Ibid., p. 141.
121/ News and Views, Spring 1994 and communication from ICA,
      April 1995.
122/ Maartin L. de Heer, "Dutch cooperatives and ecological
     developments", in  Standing Committee on Agricultural
     Cooperatives, Proceedings, Kollekolle, Denmark, 24-25 June
     1993, Paris, International Federation of Agricultural
     Producers, n.d.(1993).
123/ Communication from ICA, March 1994.
124/ Review of International Co-operation, vol. 83, No. 4
     (1990), p. 45.
125/ Review of International Co-operation, vol. 83, No. 2
     (1990), p. 91.
126/ Ibid., p. 88.
127/ Ibid., p. 97.
128/ National Cooperative Bank, op.cit., p. 28.