Italy: Italian National Association of Consumers' Coops ANCC (1995)

   This document has been made available in electronic format
           by the International Co-operative Alliance.

     (Associazione Nationale Cooperative di Consumatori)
                                                     Summer, 1995

Italy has been noted for political instability and high inflation
for many years.  By the 1990s the changes in wage indexation and
the remarkable  improvement in labour productivity brought
inflation down. Economic growth exceeded that of Germany and
France, and the size of its economy had surpassed that of the UK. 
By some calculations, it is now the fifth largest capitalist
economy, behind the U.S., Japan, Germany and France.

There are also problems.  The budget deficit is large and exceeds
GNP.  In the Spring of 1992 the entire country saw an explosion
of problems relating to corruption, involving many political
parties and many corporations.  This was a source of uncertainty. 
But out of this has emerged a positive demand, that of abolishing
the current institutional organisation.  Italy is experiencing
the transition from the first to the second republic.  

The population is looking forward to electoral reforms and highly
significant institution reforms. A third factor in this
uncertainty is the development of new formations, new political
movements mainly occurring within the right wing.  

These three factors make up the social, political and economic
reality of Italy which is currently in a very precarious
situation.  This situation is obviously causing a loss of
confidence on the part of contractors and  businessmen, the
economic subjects, and directly the consumers as well as the
Last year (May 1992-May 1993), Italy recorded a loss of
industrial production of 4 1/2%.  There was a loss of jobs of 2%
which meant that 380,000 people dropped out of the labour market. 
The cost of durable goods to households fell by 21% in the period
in question and the cost of food only increased by 0,3%.  The
unemployment rate reached 10.8%.

     "Nonetheless, Italy remains a visibly prosperous country
     with almost two-thirds of the adult population owning their
     homes and one Italian family in four has a second home.  If
     the production of goods and services of the famous Italian
     submerged economy were included in the official economic
     figures, an estimated 10% to 30% would have to be added to
     the national wealth.  This makes Italy's double-digit
     unemployment figures less serious politically than in many
     other Western European nations.  Dependence upon oil and
     raw material imports is excessive.  Italy has almost no
     domestic energy sources.  Government plans to expand
     nuclear power production were dealt a severe blow in a 1987 
     referendum vote  which stopped the building of atomic power
     stations.  80% of energy used must be imported, twice the
     Western European average.  In spite of its large trade
     deficit and the fact that it produces only 80% of its food,
     Italy does have impressive trade successes in clothing
     shoes and mechanical goods:  90% of exports are
     manufactures, over 50% of trade is with EC partners..."
                                   (PC Globe, Mapfacts)

Against this background of recession, how are the consumers
reacting and what is the situation with regard to food
consumption?  In the first six months of 1993, all operators in
the sector constantly sought to cut costs.  There has been a
widespread distribution of products ranging from various
different costs, and for the first time in Italy of the
hard-discount method.  Until recently, hard discounts could only
be found in our economy in small, insignificant, and
unpredictable areas along the distribution chain, but from the
beginning of this year it has gained a 2% market share.  These
selling methods can be found among European operators,
particularly the German and French operators, and a major
development of this method is being planned.

The commercial sector as a whole is therefore experiencing a
situation characterised by a considerable drop in consumption,
a reduction in income throughout the sector, and a loss of jobs. 
Many companies, particularly small and family-run companies are
being squeezed out of the commercial sector.  
But there is growth in modern distribution and its selling
methods, supermarkets and hypermarkets.

The cooperative movement has changed dramatically since the
1970s.  The reduction in the number of cooperative societies,
from 645 to 330 indicating a process of concentration of
cooperative societies, a reduction in sales outlets, from 1,700
in 1978 to 1150 in 1993, and here too a reduction in absolute
terms in the sense that many small sales outlets have been lost
and major outlets have taken their place.  Total sales increased
from 739 billion  lire in 1978, to almost 10,000 billion lire in
1993.  The sales area has more than doubled in the same period,
from 300,000 square meters, to 661,000 square meters.  The number
of employees has increased from 11,000 in 1978 to over 30,000 in
1993, and the number of members has increased from 793,000 in
1978 to almost 2.800.000 at the end of 1993.  

Another consideration:  The coop's share of total commercial
activities is currently 5.7% in the food sector as is its market
share.  Its share of total food and non-food consumption is 2%. 
This is not, therefore, a market share of European dimensions
such as that found in other European countries.  However, it is
the group which has the largest market share in Italy.  If we now
consider  only modern distribution, i.e., the commercial
distribution relating to the supermarkets, with over 400 square
meters of sales area, the coop market share is in this case 15%.

By analyzing the size of our companies, we see that out of a
total of 330 companies, 25 produce the overwhelming majority of
the business, with 549 sales outlets, 531,000 square meters of
sales area, nearly 1.240.000 members, with almost 24,000
employees and a turnover of 9,000 billion lire.

The selling method adopted by the 25 major cooperative societies
is characterised by 14 hypermarkets having an average sales area
of 5,600 square meters.  Then there are 119 integrated (food and
non-food) supermarkets with an average sales area of 1,600 square
meters and 229 only food supermarkets with an area of 793 square
meters.  These are the average sizes in our modern structure.

To give an idea of what we mean by major cooperatives, in
descending order of size:  Unicoop Firenze with a turnover of
1,227 billion lire in 1993, a growth of  10,2% in 1992 and
377.000 members;  Coop Estense covering the area of Modena and
Ferrara, with a turnover of 958 billion lire, a growth of 6,9%
during 1990 and 197.000 members;  Coop Emilia Veneto, covering
the area of Bologna and the Veneto region, with a turnover of 973
billion lire and 243.000 members, Coop Toscana-Lazio, Novacoop,
Coop Liguria and other cooperatives in descending order of size.

What are the trends in Italian distribution?  A drop is expected
in the absolute number of food shops, with a growth in
supermarkets, and a substantial growth in hypermarkets, from 101
in 1992 to 148 in 1995:  the coop forecasts for the period from
1993 to 1995 is of an increase of 8 hypermarkets in 1994 and
additional eight for the 1995-1996 period.  All sales structures
will have sales areas of over 3,000 square meters.  The
integrated supermarkets (food and non-food) will grow by eight
units in 1994, while the food supermarkets will grow by four

We have thus examined the political and institutional situation
in this country, the economic dimension of the commercial sector,
and the presence of coop.  We shall now look at the aspects which
most directly affect our two working days, namely, the coops'
social policy.

1.        Innovating Participatory Democracy

1.1.      Innovation of Members' Activities and Management
          Participation Based on Participatory Democracy

1.1.1.    Understanding the needs of members and the role of the

The Cooperatives' social role that clearly emerges among
consumers from their charter is based on constitutional
principles which favour the communities of users particularly in
the cooperative form recognising the high social function (former
articles 43 and 45) of the Italian constitution which establishes
the protection of the right to the health of citizens (former
article 32); on the community principles of the European Union
with respect to the protection of consumers; on the provisions
of the new national cooperative law (Law 59/92).

The reason for coop's existence coincides with its objectives
that are represented by its mission.  For Coop, the enterprise
is a means through which such objectives may be reached.  Coop's
social role is expressed through the realisation of these
objectives which have been formulated as follows:

*    to represent the interests and values of the members and
     guarantee democratic participation in the cooperative life;

*    to protect and represent the rights of consumers, defending
     economic interests, health and safety and protecting their
     surrounding environment;

*    to offer the utmost quality and the best service at the
     lowest possible market cost;
     to favour the formation of a critical awareness that is
     careful in protecting the consumer;

*    to contribute toward the development of consumer
     cooperation through innovation and modernisation of sales

*    to establish itself as the most qualified sales
     organisation for its high quality structures and excellent
     consumer service;

*    to qualify the professional level of its personnel to
     improve consumer service;

*    to finalise accumulation for reinvestment purposes in order
     to produce an increasing number of services and create new
     employment opportunities.

Coop has nearly three million members belonging to all the social
and age groups.  It is only through the proper understanding of
the development of needs that Coop can legitimise its own
existence and reach its objectives.  Understanding the
expectations of such a wide social base requires a correct
classification and an adequate system that monitors the
development of values, behavioral trends and needs.

Coop analyses the consumer and classifies him/her according to
different dimensions and tools:

     the member - the consumer as a citizen: the changing system
     of values, the social structure and the environment, paying
     attention to the emerging social needs.  For this purpose,
     Coop carries out research activity on the Italian and
     European social development;

     the member - the consumer as a potential or actual client;
     the purchasing trends and the expected service quality are
     analyzed based on the fact that Coop must be the leader in
     the relationship with the consumer;

     the consumer - as an owner member who participates or who
     wishes to participate in Coop's institutional and
     educational activities.  This is the most important and
     complex target.  In this case action is not only limited to
     research, but to relations and direct listening realised by
     the local social structures (area committees) that
     constantly involve the members and interpret their
     principal needs.

A fourth segment is also represented by the members of the
representational bodies who are involved in the decision-making
process and constitute the base units of the democratic and
participatory structure.  Consultation and involvement activity
as well as all the typical institutional control activities are
aimed at them and will be discussed in the following chapters. 
As we will see, these are nearly 7000 members who make up the
active base of Coop's representation.

The principal criticism concerns the following:

*    difficulty in developing participation for such a high
     number of members.  The initiatives involve only a small
     minority of the social base;

*    difficulty in identifying a representational model of the
     social base so that the Board of Directors and the area
     committees truly represent the social base.

1.1.2.    The creation of new fields of activities for members

*** Initiatives for involving the member as a consumer

Based on the above-mentioned concepts, our most recent action has
been aimed at initiatives towards the consumer member:  the
involvement and listening to the consumer also as a moment of
confrontation, of reaching Coop's objectives regarding cost,
service, quality and safety, social and civil values.

For this purpose, many cooperatives have established the "100%
service satisfied" in order to increase and improve relations
between Cooperatives and consumers as well as to create dialogue
that allows the Cooperatives to better respond to the needs of
consumers (in 1963, 5 cooperatives out of 13 had established such
a service).  The members and consumers have always had the
possibility of returning the defective products.  The new policy
also includes highly innovative and competitive products.  We
wish to stress that this service offered to members and consumers
is free of charge and only costs 0,038% of sales and instead
indicates a sharp rise in participation defined as participation
in the purchasing power which is different from that of any other
Italian distribution chain.  Coop devotes great attention to
motivations, some of which legitimate, that cause the consumer
to change his attitude towards purchases.

The other example of non-institutional participation is that
which we have defined as the "Direct Line", or "Listening"
project which we are experimenting in one of our cooperative
companies.  Within the context of such a method, we provide the
consumer with a series of tools that range from the board on
which notices and opinions are to be attached placed within the
sales outlet, to the toll-free telephone number that the member
or the consumer can use to call the cooperative company and
express his opinion, criticism or suggestions.  The Coop journal
also exists that contains questionnaires on the quality of
service in the sales outlets.

Furthermore, in 1993, 9 cooperatives out of the 13 major ones,
conducted consultations and referendums (binding in the case of
Coop Emilia Veneto) so that its members could choose those
products or services to be inserted in the list of discount and
special sales initiatives reserved to members only.  The
participation in this type of consultation registered 30,000
member voters in Coop Emilia Veneto.

*** Initiatives for involving the member as "owner"

In this case we have attempted to introduce a more general type
of analysis of the democratic and participatory system within
Coop.  This represents one of the large national projects
launched by Coop that is presently being defined.  What has been
done up to now concerns the review of the already existing

Our investigation had the following objectives:

*    to broaden the number of votes in the election of area
*    to promote the candidacy of councillors;
*    to provide a greater number of representatives from the
     social bodies.

Today, we have obtained the following results:

*    Campaign for self-candidacy:  various cooperatives (Emilia
     Veneto in 1992 and Liguria in 1993) conducted a campaign to
     stimulate self-candidacy for area Representatives.  These
     initiatives produced excellent results in terms of

*    Voting in Sales Outlets:  another highly  innovative method
     consists in organising voting in Sales Outlets in order to
     give the opportunity to the greatest number of members to
     participate.  The ballot boxes are placed for about a week
     in all the Sales Outlets and also in this case, results
     have been excellent (for example:  in Coop Liguria, 22,000
     members elected their own area committees).

*    An electoral commission:  this is a social body that has
     the task of selecting candidates according to criteria of
     competency and commitment demonstrated towards social
     activities (i.e., volunteering, environmental protection).

*    Another significant experience was realised in the field of
     training the newly elected members.  Upon their entry, the
     members attend a course on cooperative training based on
     the themes of cooperation, product quality, environmental
     quality and listening to expectation.

*    In many cases research activity, listening initiatives,
     training and information provided to members are all
     conducted by the members of the area committees.

*    In certain cooperatives, aggregation initiatives were
     carried linked with specific interests of the members, in
     particular, volunteering, environmental protection, safety
     and consumer education.

All the above activities are integrated with the Coop's most
consolidated participatory activities:  activity of educating
with respect to consumer products, information, advantages to
members.  In this field, the most significant experiences concern
permanent laboratories, actual places where education is provided
with regard to consumer products and whose activities are mainly
directed to young people, schools and local communities.

1.3.      The participation of members and employees in the
          decision-making process

Coop's social structure will soon be the subject of an
institutional reform 

Today, Coop represents the trademark of an associated cooperative
system:  there is a system category (GIUNTA and management where
the presidents of the major cooperatives and district
associations participate) and a category of single cooperatives
(board of directors and area committees).

The area committees (representatives of a territory that in
certain cases coincide with the sales outlets) are physically
located in the sales outlets and are formed by about 10/15
members elected every three years.

For some years, an attempt has been made to broaden the criteria
of representation from the single sales outlet to zones or
geographical areas. These criteria will be fully discussed in the
reform proposal since Coop feels that it is very important to
maintain a close link with the local communities without falling
into an exaggerated attitude.

The area committees convene to approve the budget and other
topics of civil obligations; during the assemblies the delegates
that will participate in the general assembly with a compulsory
mandate are elected. In this way the vote expressed during a
local assembly is binding and the areas can express their own
decision-making weight.

Nonetheless, the principal problem of reform is represented by
the Board of Directors. The Boards of Directors are formed by a
number of members that ranges from 17 to 44 members elected every
three years.  The members are not part of the Board of Directors
nor of the area committees.  Only in one case the Presidents of
the area committees are part of the Board of Directors.

However, due to the enterprise's development, to the changes in
society and of the institutional structures, it is necessary to
strengthen the sources of legitimation.

As already mentioned above, the new proposal for institutional
reform will have to update Coop's role in economy, the principles
and criteria of representation, the regulations and codes and the
participatory and election systems.

2.        An Organised Structures that Corresponds to
          Participatory Democracy and to a System made for

2.1.      The social organisation

The cooperatives of the Coop system are organised into areas or
member sections having their own committees, in addition to the
Board of Directors.  In order to promote an exchange of
information with the Board of Directors and the involvement of
the areas, most cooperatives have created intermediate bodies
formed by the presidents of the areas.  Such bodies have a
consultative nature and are convened for the most important
decisions.  The area committees have an autonomous budget for
organising their local activity.  One of our cooperatives (Coop
Emilia Veneto) has experimented a new model that includes the
presidents of the area committees in the Board of Directors.  The
role attributed to the areas is that of  local representation, 
managing monitoring activity of the needs of the local societies
and  controlling  the cooperative results.  At Coop, the member
assembly is articulated in separate assemblies of sections or
areas.  Activity aimed at developing the social base has recently
been conducted also promoting membership through specific
campaigns and initiatives.

The following activities have been carried out:

*    campaigns on services and the material advantages of being
     a member;

*    initiatives aimed at obtaining support on common interests
     (i.e., environment, recycling, etc.).

Results were satisfactory in:

*    the number of members is constantly increasing (at Coop,
     membership has a base cost of an average of Lire 40.000)
     even though our problem is not represented by the  increase
     in number of members, but in the increase of members that

*    the number of members that are involved in initiatives is
     also increasing, particularly for those initiatives
     regarding the commercial area, but not exclusively;

     the socio-demographic formation tends towards a greater
     presence of young people and women with middle-higher

The members of the area committees approve the draft and final
budget and in some cases, the Corporate Budget.

The following initiatives have been tested in order to involve
members in commercial activities:

*    binding referendum to choose products on sale for  members
*    involvement of committee members in polls taken on client
     satisfaction at Sales Outlets.

In addition to the monthly journal sent out to all members, many
cooperatives also mail newsletters on the activities of the Board
of Directors and of the management.

2.2.      The structure of the existing control

As already mentioned, Coop is organised into areas or territorial
sections that correspond to one or more stores.  Until some time
ago, the organisation was based on the store; today, this
characteristic has been superseded in almost all the

Since this represents a form of enterprise whose ownership is
widespread, control is articulated at the following different

*    much more rigorous norms with respect to those established
     for corporations.  Cooperatives, in fact, in addition to
     controls envisaged for regular companies, are also subject
     to self-controlling their national associations with
     regular audits, to the supervision of the Ministry of
     Labour and for the medium-large cooperatives, also to the
     mandatory certification of budges;

*    the control of representational and assembly bodies;

*    the control of members at the system's level (National

*    the control of the cooperative headquarters;
     the control expressed by the organisations that interact
     with Coop within society and the market.

At this point the Cooperative Social Budget that our enterprises
draw up annually represents a true means of control and direct
participation for Coop's various different interlocutors.  We
will further dwell on this topic in Chapter 4.

Innovations achieved by the National Association include the

*    the publication of the social budget of Coop's system and
     of every cooperative, a report with the results obtained in
     relation to the objectives of the mission;

*    national assemblies where approximately 10 to 30 delegates
     per cooperative participate; such assemblies are convened
     every 3-4 years to elaborate Coop's common multi-year
     policies.  In 1992 an assembly was held to define the
     system's social policies and in March 1995 the national
     assembly for Coop's environmental policy will be held in

We would also like to recall that one of the objectives of the
above-mentioned reform must be to favour the control capacity
through various different tasks on the part of the councillors
as well as a greater participation of the members in the election
phases (voting at the Sales Outlets).  In addition, another
objective is to stimulate the interest on the part of the members
through a more massive communications campaign to self-candidate
themselves for the role of councillor.

2.3.      Employee participation

Coop's members are the consumer and not the employees even though
the latter may choose to be members.  The problem regarding
employee participation regards management policies of human
resources and style and Coop values regard working conditions and
employment.  A national Seminar was held in July 1993 with the
top executives of all the cooperatives to elaborate a policy of
human resources based on the entrepreneurial culture and
involvement of human resources. The National Association of
Consumer Cooperatives also emphasised the principal points
underlying Coop's employment policy:

*    sharing and transmitting values, commitment and
     responsibility for all;
*    the management is involved in elaborating regulations and
     policies in coherence with the mission;
*    consolidation of relations with the unions;
*    protecting occupation and professional growth;

For this purpose, the national system has undertaken several
important initiatives:

*    in 1992 research was conducted on the expectations and the
     atmosphere among the 30,000 Coop employees out of a sample
     of 1000 individuals;

*    various inter-cooperative projects were defined among
     *    the "quality" project aimed at spreading work systems
          in groups to improve client service;
     *    the "Domino" and "Marco Polo" training projects aimed
          at Coop managers and professional employees at
     *    a new national union agreement has been reached filled
          with group incentives (collective and departmental
          production awards).

Other important feasibility projects are being also elaborated
such as the project for a Coop central school and techniques to
improve internal communication.

3.        Provide Information on Objectives and on the
          Organisation's Results - Introduce a system of social
          controls and social auditing

Social responsibilities exist that Coop has assumed towards
society and it is necessary to document such responsibilities. 
We have taken on this role during the '90s.  It has taken three
years, from 1990 to 1993, for this system to be introduced and
adopted by the entire system.  We have defined it as the
"Cooperative social report or analysis".  It is an instrument
that provides clear and timely information on commercial
activities.  Furthermore, the cooperative social report provides
the list of the cooperative's social activities carried out in
reaching its objectives.  It is a tool that accurately highlights
the differences between the Cooperatives and other commercial

The purpose of the cooperative social report is to be an
informational tool and a means of programming and planning:  in
the last two or three years, our companies have programmed
activities in terms of achieving their final objectives.
However, the prerequisite for developing social activities is
naturally represented by the company's high profits.  This is
necessary, but not sufficient.  It is only a precondition.  The
company's various different activities are run within the context
of the objective of social responsibility.  It is a means of
communication both internally with employees and members, but
above all with the outside world, with the community as a whole,
consumers and the rest of the cooperative movement.

The social report is structured into sections that correspond to
the different "interest holders" or stake holders, namely, those
who  have particular interests and benefit from the cooperative's
existence and activities:

- members,
- consumers,
- employees,
- civil society and the local community,
- the cooperative movement.

For each of these categories, the following are drawn up:

- mission,
- policies and guidelines,
- objectives,
- results obtained,
- future objectives,
- costs sustained.

This is obviously a plan drawn up both on descriptive and
quantitative terms.  For the moment, the social report is drawn
up in its final version, but a draft is also being planned.

We shall now briefly analyze the contents of the 1993 social
report: (Table 1-2)

Results : Members

Towards the end of 1993, the members totalled 2,740.000  with an
increase of 160,000 units.  We are growing at a rate of
150.000/160.000 members a year with  an institutional
participation that is quantifiable in 1000 assemblies held by the
members during the course of 1993.

There is also a social type of participation with a total of
300.000 hours of voluntary activity on themes of consumption and
the environment; in 1993 such activity cost 26 billion lire.

With reference to the economic interests of members and the
economic advantages for users and consumers, 40,000 members were
consulted to learn their opinions regarding the special offers
and discounts.  Over 5 million members benefited from the
discounts and the special offers reserved to members, a form of
discounted prices that is promoted among members during certain
periods of the year.  Additionally, some of our companies also
offer a refund that is proportional to the expense made during
the year under the form of a re-evaluation of the capital
subscribed by the members.  This initiative involves more than
60% of all the Coop members of the cooperatives that practice
this form of reimbursement.  In 1993 all these activities offered
members an economic advantage equal to 60.000 million lire.

As for social communication, that includes the publication of
periodicals; in 1993 1.800.000 monthly periodicals were mailed
to members together with other information bulletins for a total
cost of 7.605 million lire.

Results: Consumers

As for the activities aimed at protecting health, we principally
refer to the applications of the rights established by the
European Economic Market on consumer defence.

One of the principal fields of application is represented by the
Coop products.  There are 600 reliable  quality products that
succeed in competing with the products of the most well known and
major brands.  Since these do not involve any advertising and
promotional costs, they are offered at low and competitive
prices.  Nonetheless, they are quality products that respect the
environment and during 1993, Coop conducted more than 110.000
quality and safety tests on these products. These activities
aimed at protecting the consumer's health cost 8.072 million lire
in 1993.

Furthermore, always with regard to consumers, in 1993 our
cooperative companies developed various different educational and
training programs that principally concerned schools and that
were aimed at the young consumers. Within the context of these
programs, they utilised a series of different tools.  For
example, "the tool box", consisting of a kit that we sent to more
than 70.000 secondary school teachers in Italy.  It is based on
traditional topics such as food and nutritional education as well
as on other more specific subjects such as domestic accidents,
information on supermarkets, etc.  The classes are formed by
students and teachers and are conducted at our sales outlets.
We have also created a new sector for the elderly based on
research conducted to learn their opinions on cooperatives, their
expectations with regard to products, services and social

As far as environmental protection is concerned, we have reached
an agreement with Replastic, a national consortium created for
the differentiated collection of packaging materials which has
led to the creation of "ecological islands" in many Coop sales
outlets.  These are collection points for the various different
types of packaging materials that have allowed us to collect more
than 25.000 tons of packaging cardboard.

Always with regard to packaging, we are drawing up a project that
aims to collect materials that form secondary packaging of Coop
labelled products, their recycling and the production of new
packaging materials.  Closing the circle means completing the

The campaign on pesticides, with which we created a document that
provides evidence of our activities,  during the month of July
1993 deeply involved Coop with petitions (more than 1 million)
aimed at the Italian lawmakers for introducing a new law that
updates our legislation in this field.

Environmental protection represents the most innovative field for
Coop's activity:  differentiated collection, recovering and
recycling materials, education and environmental protection.

Also worth mentioning is the information activity through the
consumer journal and through specific initiatives such as
conferences-exhibits and seminaries.
Coop has invested more than 5 billion lire for consumer education

Results: Civil Society

With regard to relations with society, we actively collaborate
with various different voluntary associations, in particular with
an association linked with the problems deriving from multiple
sclerosis.  We are also developing important collaboration
projects (development activity) with various Third World
countries such as Burkina Faso, Latin America, Senegal, Nigeria
and Mozambique:  we are also working on multi-ethnic educational
projects aimed at schools and young people. In 1993 only, all the
above-mentioned projects have cost 7,586 million lire.

As part of the changes that have taken place, the adoption of a
social report has constituted a determining factor in so far as
we realised that when members participate in the annual report
approval meetings, those meetings that illustrate the year's
final report, they do not participate as owners, since they are
not shareholders who have invested capital in the cooperative and
therefore expect a redistribution of dividends, but as users who
expect qualified services.

Our objective is to draw up a single cooperative report that as
such strongly emphasises the social objectives and Coop's
responsibilities.  As already stated, this means having
administrative directors that are aware of civil and legal
aspects, but that are also guided by the correct interpretation
of Coop's mission and the requisites expressed by our members.

The social report project still remains open.  The areas that
need to be developed concern the formulation of the budget, the
establishment of indexes and fixed points of reference, the
access to various accounting information through an information

4.        Issues Regarding Employees and Management

4.1.      Aspects relative to the top management in the
          initiatives aimed at promoting human resources and the
          development of participatory democracy

At Coop, employees are also owners in so far as they are
consumers, but they do not represent interests linked to their
occupation in the company.  The development of participatory
democracy and the promotion of human resources concern the values
of the leading group that elaborates initiatives aimed at
involvement and participation and expressing a style that is
non-authoritarian and motivating.

Coop's internal organisation does not include a representation
on the part of the employees, except for the traditional form of
the union since it has always been believed that such a choice
could conflict with the interests of the consumer members.

Today, Coop's problems can be summarised in the following points:

*    need for a generational change and promoting a new managing
     group that brings forth more innovative projects;

*    passing from a culture that is based on a steady job to a
     culture of many different tasks and flexibility, provided
     that one of Coop's fundamental values is represented by the
     protection and development of occupation and working

*    increasing efficiency and reducing costs through increasing
     responsibilities of all working conditions;

*    defining tools and regulations that guarantee the
     expression of a participatory culture in light of our
     enterprises' large growth in size.

With regard to initiatives and training, we have already
mentioned the most significant issues.

Partnership with members is not Coop's characteristic trait. 
Lately, an attempt has been made to sensitise employees towards
services to consumers since most of activities for members are
realised by the social structure and only a small part by the
commercial one.  One of the present objectives is precisely that
of rendering Coop's social initiatives more visible within the
Sales Outlets since they are much more evident in the medium and
small sized Sales Outlets and less so in the hypermarkets.  This
will also necessarily involve the employees.

5.        The essence of being a cooperative in the new society

The '90s have shown us that the industrialised world is
drastically changing.  A responsible cooperative is formed on the
ethical behaviour of cooperatives.

Giorgio Vozza (1993) summarises this behaviour as follows:

     "Cooperators agree on the need to return to basic concepts,
     to recuperate and adapt to present needs the motives and
     traditional elements of cooperation and their practical
     use.  In order to succeed in this intent, organisations
     must devote greater attention to listening.

     This "creed" does not contain anything ideological and is
     firmly linked to market research, to the analysis of the
     consumers' expectations and the new mentality emerging in
     this decade.  The analysis conducted by cooperators, in
     step with that conducted by private entrepreneurs,
     highlights the obvious superiority of certain approaches
     such as employee involvement, the concept of an enterprise
     led by citizens, the cooperatives' social commitment, the
     attention towards consumers, transparency in management
     procedures and the personal prestige of its leaders.

     All these elements perfectly comply with the nature and
     identity of the cooperatives that have the fortune of being
     characterised by values and ideals that are much
     appreciated today.  However, this is not sufficient for
     being competitive and for remaining in the market.

     Two fundamental criteria exist:  responsibility and
     coherence.  Our thoughts and actions must be coherent with
     each other.  We must attempt to express ourselves in a
     better way:  we must depart from a simple equation which is
     E = R + C  (Ethics = Responsibility + Coherence)".

Below is a list indicating the way of how this can be put into

     Responsibility towards members that have specific rights
     that must be respected:  from the right of being informed,
     to the right of participation, to the direct election of
     the directors of the cooperatives to which they belong.

     Responsibility towards consumers to whom the cooperative
     must offer merchandise that is safe, of high quality and at
     competitive costs.

     Responsibility towards employees, training and practical,
     that goes beyond contract guarantees in order to propose
     more effective forms of involvement.

     Responsibility towards society, from the small community
     with only one cooperative sales outlet to  the more complex 
     relations in  large cities; commitment to improve the
     quality of life for the citizens through positive action.

     Responsibility towards the environment, reformulating
     consumer products and distribution, without polluting, but
     cleaning, collecting and cooperating.

     Responsibility towards the institutions:  a loyal
     confrontation without subordination or mediation between
     each institution and not between the private body and the
     public one.  The latter must be reminded of its duties
     towards cooperation and service for the citizens.

     Responsibility towards the heritage which must be
     accurately managed and possibly improved constantly.  Part
     of such heritage is material, while the other part is
     abstract as is our reputation and the market quotas.

     Responsibility towards competition with whom the
     cooperatives  must demonstrate their superiority and

     Responsibility towards our ideals: which must not be
     forgotten, but put into practice and defended

     Responsibility towards procedures: particularly those
     regarding the functioning of the Bodies, our democratic
     approach and the proper management of the decision-making

     Responsibility towards the organisation:  the Association,
     the League and the other cooperatives that must be helped
     and supported in developing themselves  as far as possible.

Social objectives must be formulated every three years through
quantitative indicators.  The annual, economic and social report
can become the best tool to verify progress.   At the end of the
mandate it will be easy to establish whether or not the
objectives set have been reached.  As society changes and takes
on a new shape, the organisations must become socially
responsible in order to gain respect.


Changes that occurred in the Italian consumer cooperatives from
1982 to 1993
               1982     1990      1991     1992      1993
No. of Coops    593      341       338      335        330
Sales Outlets  1486     1162      1179     1165       1150
Turnover (1)   2184     7458      8765     9733      10680
Sales surface 
      area (2)  361      566       622      656        684
Employees     15711     27656     28826     30179      31406
Members (3)     1.2      2.3       2.4      2.6        2.8

(1)  in billions of Lire
(2)  thousands of square meters
(3)  in millions


Summary of the cooperative social report 1993 for the entire
national Coop system

            1993 SOCIAL COSTS (in million of Lire)

1.1. Representational costs and participation      L. 26.401
1.2. Costs for economic advantages to members      L. 60.340
1.3. Costs for social communication                L.  7.605
1.   Subtotal                                      L. 94.346

2.1. Costs for quality and safety                  L.  8.072
2.2. Costs for consumer education and training     L.  3.649
2.3. Costs for information and research            L.    773
2.4. Costs for environmental protection            L.  1.057
2.   Subtotal                                      L. 13.551

3.1. Cooperative and professional training costs   L. 13.740
3.   Subtotal                                      L. 13.740

4.1. Costs for supporting research for multiple sclerosis
                                                   L.  4.000
4.2. Costs for social and civil solidarity and 
     for territorial cultural development          L.  3.182
4.3. Costs for developing countries                L.    404
4.   Subtotal                                      L.  7.586

5.1. Funds intended for indivisible reserves       L.424.462
5.2.      Cooperative development & promotion fund L. 13.491
5.        Subtotal                                 L.437.953

Subtotal items 1-4                                 L.129.223
Subtotal item 5                                    L.437.953

GENERAL TOTAL                                      L.567.176

     For further information on the ANCC, please contact:
          Mr. Giuseppe Fabretti 
          Via Panaro 14
          00199 Rome, Italy
          tel + 39 6 861 01 71
          fax + 39 863 200 33