Scrutiny and disappointment are rising after Vancouver’s oldest co-operative, MEC, announced it will be sold to a U.S. investment firm, Kingswood Capital Management.
Members of the co-operative are coming together by the thousands to sign petitions attempting to stop the sale. Within two days, nearly 30,000 signatures have been collected on a Change.org petition, with hundreds added every hour.
The past several years have indeed been financially shaky for MEC, with reports of them losing upwards of $11 million in 2018. Strong local and online competition have been hard to overcome even before the pandemic brought its own set of problems.
“Despite significant progress on a thoughtful turnaround strategy undertaken by new leadership, no strategy could have anticipated or overcome the impact of the global pandemic on our business. Today’s announcement, including the transition from a co-operative structure, is creating a positive path forward for MEC,” states MEC’s Board Chair Judi Richardson in the announcement.
Many members, who joined the co-operative ownership by investing $5, are shocked that this decision can be made without consultation or approval from members. One particular critic is Steve Jones, a previous MEC board candidate, who stated “the thing that really bugs me is that members were not given an option to provide the needed funding” in an interview with News 1130.
However, it’s not just this decision that comes under scrutiny. The election process has also been a source of controversy, including allegations of fixing the election, and delaying the announcement of election results.
A core function of members within a co-operative is to elect the board, and if this fundamental process is questioned, any decisions that come after can be questioned in the same light. Co-operatives have a mandate to serve its members, and while this might be within legal boundaries, it will dissolve the structure that makes this a requirement.
In addition to a standard petition, a Facebook group has been set up to coordinate communication and action towards the board. Some are using this group to simply voice concerns, while others say it is “best to approach the problem like the owner, since that is what members are,” writes Stacy Ch, a group member proposing a special general meeting.
The transaction remains subject to Court and regulatory approvals and is expected to close in the fourth quarter of 2020. It is unclear whether petitions will be effective in stopping it, but one thing is clear, the future of MEC’s customer base is in jeopardy. The pride of being a member, of buying from a Canadian business, of supporting a co-operative with a bigger mission than shareholder revenue, will be lost.