EAST CENTRAL — Three local co-ops are exploring a merger.
Beeland Co-op, Parkland Co-op and Carrot River Co-op announced Oct. 27 they are in discussions to combine and create a new co-op.
Todd Svenson, Beeland’s general manager, said two major reasons the three co-ops are looking at a merger is an opportunity for growth and mitigation of risk.
“By partnering together our co-ops will be more resilient to increasing competition, and we will have more resources and talent to pool together in order to innovate,” a media release from the three co-ops said.
“Most importantly a new co-op will be more sustainable and better able to leverage opportunities and manage risks in the ever-changing retail services marketplace.”
The goal is for the members to benefit through greater access and convenience, as well as maintain and expand the products and services the co-ops provide while keeping up with technology. Employees are expected to benefit from having a broader network and expanded career opportunities.
Discussion underway for 1-2 years
Svenson said discussions have been underway for around one or two years, with discussions between the co-ops’ boards of directors facing some delays due to the pandemic.
In the last few years, the Nipawin-area Pineland Co-op merged with Lake Country Co-op, while the Prairie North Co-op amalgamated with Archerwill Co-op and the Kelvington-area East Central Co-op.
Svenson said those mergers saw Beeland decide to take a closer look at all of its options.
The three co-ops sat down together and found they were of a similar size, sold the same types of commodities and had a like-minded business philosophy.
“It seemed to fit fairly well, so that was kind of the kickoff point,” he said. “From there, we've gotten to this point today where we're making the announcement that we want to investigate this further.”
Ensuring a co-op presence
Another motivator for the proposed merger is to ensure the long-standing Co-op presence continues in the communities around the region. One fear the co-ops are considering in their planning is more people leaving rural communities for the larger centres.
The Beeland general manager said right now all three co-ops have strong balance sheets.
“I think that's why it's nice to look at it now, as opposed to in 20 years or 30 years where the market has changed and all of a sudden, one of the retails, two or even all three aren't in positions of strength and it becomes more difficult to make that work.”
Members to be consulted
The next step is for a formal business case for amalgamation. When that’s done, it will be examined and voted on by the co-ops’ boards of directors.
If that’s approved, the co-ops will begin formally consulting with their members.
“We'll obviously have some general meetings and some other discussion points and times with the membership to get some feelings on from them, answer some questions and see how it all comes together,” Svenson said.
The final step would be a vote for the members of all three co-ops.
The co-ops expect this process will continue throughout 2021. If approved, the new co-op would be launched in late 2022 or early 2023.
“We wanted to kind of get this out to our staff and to the membership to get the discussions going,” Svenson said, adding the timeline will let the co-ops know if there’s anything they need to recognize going into it or if there's any pain points they’d have to deal with.
“We're all pretty excited about it. For the long term sustainability of our retails, I think it's a good move.”