COOPFED;A SUCCESS STORY OF CONSUMER COOPERATIVES IN SRI LANKA D.S.K. Pathirana General Manager / Chief Executive

Sri Lanka Consumer Cooperative Societies Federation .

Amongst the successful stories of consumer cooperatives in the Asia-Pacific region, the story of

Sri Lanka Consumer Cooperative Societies Federation popularly known as ‘COOPFED’ is quite

notable. The bond which it has developed with the consumers in a cooperative spirit shows the

strength of the cooperative concept.

Sri Lanka Consumer Cooperative Societies Federation is one of main essential goods and services

supplier in Sri Lanka since the year 1989. Its main purpose is to import, procure and supply the

consumer requirements / food items of the member multi- purpose cooperative societies

through out Sri Lanka so that the consumers can purchase these items at fair and reasonable

prices.

In the recent years, COOPFED has adapted quite well to the demands of the competitive

economy. In order to cope up with the pressures of market economy, COOPFED is well aware to

protect the interests of the consumers. It now directly deals with the consumers for whom this

is a big benefit. COOPFED has opened its 13th coop city super market in the island State. The

Government as well as the top management of COOPFED have identified the Super Market

project as most important for the consumers and they hope to open eight new super markets

in this year.

COOPFED is all geared to improve the cooperative knowledge of cooperators. In this regard it

has established the training centre named Consumer Cooperative Management Training

Institute. This centre is improving the cooperative knowledge of the cooperators and enhancing

their professional skills. COOPFED is a successful business project for all the cooperators

as it provides social benefits to all. The ICA members and the other cooperators in the world

should come and visit the cooperative super market project and see the successful working

of the COOPFED training centre.

The cooperative movement is one

of main balancing factors of the

economy in Sri Lanka. The history

of the cooperative movement in Sri

Lanka can be traced back to 1904

when the Agriculture Credit Society

in Manikinna was started. The first

cooperative society was established

as Co-operative Credit Society

under the Co-operative Society Act

No. 07 of 1911. Since 1911 the cooperative sector in Sri Lanka has played a major role at various

stages, and there have been changes in its organizational structure with relevant legislations.

Before 1983, cooperative societies were registered under the Cooperative Societies Act No. 05

1972 and this was again amended in 1983 and later in 1992 as the Cooperative Societies

(Amended) Act No. 11 of 1992.The management structure of the cooperative societies has been

established under the Cooperative Employees Act No. 12 of 1972, and this was amended as

Cooperative Employees (Amended) Act No. 51 of 1992. The cooperative societies have been

organized as multipurpose societies.

As Sri Lanka is a developing country of the third world nation the activities of the cooperative

sector in Sri Lanka have been closely linked up with the daily life of the majority of the

population over half a century. The cooperative organizations are actively engaged in a variety

of activities related to economic, social and political significance. They are involved in

distribution of consumer goods, supply of essential consumer services, supply of agricultural

inputs, promotion and marketing activities in the fields of agriculture, fisheries & industry, as

well as mobilization and allocation of savings in the rural areas with the mutual assistance of

the Cooperative Rural Bank.

Under the present set up COOPFED is engaged in development and promotion of the consumer

cooperatives through improving consumer cooperative performance in Sri Lanka so as to help

the members at the grass root level. The ultimate objective is to increase members income and

ensure their active participation in cooperative business ventures

The Sri Lanka Consumer Cooperative Societies Federation Ltd was registered on 15 September

1989 as the apex Federation of the Consumer Cooperative Movement in Sri Lanka and it

commenced its business operations on 7 March 1990. The need for an organization at the

centre to assist the consumer cooperative societies was felt and the Cooperative Federation

was established with the contribution of the state. Its main purpose has been to look after the

consumer needs of the member multi- purpose cooperative Societies throughout Sri Lanka. The

COOPFED has gone further by setting up and opening self-service shops in the urban and

rural areas as well as opening up welfare shops in the government offices and schools.

All multi-purpose Cooperative Societies operating through out Sri Lanka shall be members of

the Cooperative Federation. The value of one share is SLR 25,000.00, and all the members are

entitled to take one share of the share capital. At present 270 multi- purpose cooperative

Societies have taken membership as active members of Cooperative Federation. Sri Lanka

Consumer Cooperative Societies Federation has several business tasks like wholesale business,

retail sale, air ticketing section, production and packaging unit, etc.

The Cooperative Federation is an active member of the International Cooperative Alliance since

1995 and it is having strong international cooperative relations with the various cooperative

organizations around the world like ICA,ICA-

AP,CICTAB,ANGKASA,JCCU,ESCOLA,NISPED[Israel],etc.

Fair Price Super Market

Each & every kind of consumer items

available including garden fresh

vegetables, fruits, dal, rice, sugar, dry

fish items, fish & chicken, grocery items,

etc., are available at various shops like

Colombo Coop City Super Market,

Polgolla Fair Price Super Market, Paranthan Coop City Super Market, Panadura Coop City Super

Market, Piliyandala Coop City Super Market, etc.

According to Establishment Code of Sri

Lanka Consumer Cooperative Societies

Federation, super markets should have

both individual records as well as final

accounts. Due to the difficulties in the

traditional accounting system, a

computerized accounting system has

been introduced which has been very

beneficial.

COOPFED super markets are running as

a Super Market Network and this

network is controlled by the

commercial department at the head

office. Due to this it can have regular

information related to live stock

updates, daily turnover, purchasing and

money balance, etc. This network is

directly connected with the head

office’s accounting department. Because of that, Individual final reports and overall final reports

are made by the accounting department on monthly as well as annual basis.

Many of the super markets are

running on customer self service

method. They can select goods based

on their needs. The employees are

trained in issues related to customer

care and safety of goods. The visual

camera system is a big support

mechanism for the smooth functioning

of the super markets. Visual updates on daily basis are recorded in main saver computer in the

super market and again these updates are recorded by main office also. The daily customer

service, customer needs, customer behavior, goods security and employee behavior are well

monitored.

There has been no credit sale by

the super markets as the emphasis

has been on cash sale only. Before

five years, primary cooperative sale

shops had credit sale. As a result of

that, the number of creditors was

quite high. Therefore Sri Lanka

Consumer Cooperative Societies

Federation took a decision to stop

credit sales. According to this

decision, COOPFED started using electronic cards such as various credit cards, debit cards, visa

cards and other money transferring electronic bank cards.

The cooperative super market

system is mainly controlled by the

General Manager and he is the

chief executive person as well as

top responsible person. All the

issues related to functioning of the

super markets are discussed with

the executive board and board of

directors by the chief executive.

Daily updates of super markets are

received and there is quick decision

making by the top management.

The Supervisors are appointed for

each super market. The appointed

persons report all issues, customer

requirements and market variances

to the commercial department. The

Sri Lanka consumer cooperative

societies federation has a super

market main store in head office and it has five regional super market stores. The super

markets requirements, like consumer goods items are distributed from stores using federation’s

transport system. For special days and events, the Federation is involved in marketing

promotions. These promotions are mainly handled by the commercial department and there is

annual promotion named as “GAMIN GAMATA DORIN DORATA”. The COOPFED staff with

mobile sale vehicles go around the island for mobile sale. Not only that, COOPFED organizes

short term business promotions for special goods and new consumer items but the

advertisement marketing system is avoided in this case. The country has strong belief in

cooperative consumer system and due to this there is direct government support which is not

in the case of the private sector.

In future, the Federation expects to develop the super market system for successful business

diversification. Without diversification, the cooperatives can not face market competition and

can not protect our consumers permanently. In this regards, Sri Lanka consumer cooperative

societies federation is always trying

to look after the customer needs.

Sri Lanka Consumer Cooperative

Societies Federation has identified

many areas for developing the super

markets. One crucial area is related to

training and development of staff.

The training institute has been

established for conducting training programmes. These are short-term training programmes,

field visits, full time courses and international training programmes.

The Consumer Cooperative Management Training

Institute

The main objective of Consumer Cooperative

Management Training Institute is to utilize the

human resources in a very constructive and

productive manner so that their knowledge, skills

and aptitude are rewarded on merit basis.

The Federation has started an Education Unit

named Consumer Cooperative Management

Training Institute. All cooperators can now develop

their consumer cooperative knowledge, computer

knowledge, English knowledge, as well as Human

Resource Management Skills. The Institute runs

various courses like Certificate Course of Computer, Certificate Course in Professional English,

Certificate Course of Super Market Management, Diploma Course of Human Resource

Management, Certificate Course of Consumer Cooperative Management, etc. The 1st one day

workshop on “Achieving Business Objectives by Improving Customer Relationship” was

successfully conducted by the Institute recently. 50 employees participated in the one day

course from 25th members of Multi Purpose Cooperative Societies in Colombo district and

Kalutara district.