What are co-ops and mutuals?

Co-operative and mutual enterprises (CMEs) form when people come together to achieve an objective that they could not achieve alone. They are a rational alternative to investor-owned business when the objective is different from maximising return to shareholders.

Co-operatives often come about as a response to the failure of a market to adequately serve the interests of customers, workers or producers. Once established, they have proven to be highly successful and long-lived, with many co-ops and mutuals operating for over 150 years.

All co-ops abide by seven international co-operative principles that ensure all stakeholders in the business – customers, workers, suppliers – can have a say in the enterprise.

Fast facts:

  • Co-ops and mutuals are businesses formed to benefit their members, drawn from the stakeholders of the business such as customers, suppliers, employees or people in the local community.
  • The purpose is different from an investor-owned firm; Co-ops and mutuals exist to deliver benefits back to members, rather than profit maximisation and returns to investors.
  • Co-ops and mutuals operate across much of the Australian economy.
  • From farming to finance, health to housing, motoring to manufacturing, they deliver trusted products and services in some of the most competitive domestic and international markets.
  • With good management it is an efficient model of business, with no leakage of value from the business and all returns reinvested locally.
  • 8 in 10 Australians are members of at least one co-operatively owned business.
  • Including member-owned super funds, co-ops and mutuals contribute around 8.3% of GDP (The Size of Australia’s Co-operative and Mutual Sector).

What are co-ops and mutuals?