Japan: Consumer Co-op Movement in Japan (1995)


by Isao Takamura,
President of Japanese Consumers' Co-operative Union

The consumer co-op movement in Japan has grown to incorporate as
many as twenty percent of all households, making us the largest
consumer organization in the country.  We began with activities to
supply safe and reliable goods under the slogan, "For Peace and a
Better Life," but now co-ops are engaged in a wide array of mutual
help activities covering all aspects of daily living; we are no
longer restricted to consumer concerns.

History of the Movement

The first co-ops in Japan were born in 1897, but it was in the 1920s
that the movement to organize co-ops started on a larger scale. In
1921, Nada Co-op and Kobe Co-op (merged into NadaKobe Co-op in 1962,
renamed Co-op Kobe in 1991) were established under the leadership of
Toyohiko Kagawa, the father of the Japanese consumer co-op movement. 
Later, the two co-ops acted as the driving force for co-ops in Japan.

The aim of the movement at that time was to better the living
conditions of poor people, and Kagawa advocated seven principles: 
       1) mutual sharing of benefits, 
       2) a humane economy, 
       3) sharing of capital, 
       4) elimination of exploitation, 
       5) decentralization of power, 
       6) political neutrality, and 
       7) emphasis on education. 
Spreading the ideal of co-operatives, he helped to set them up. 
However, the Japanese militaristic government forced co-ops to break
up and disappear during World War II.

After the war, various democratic movements which were more or less
destroyed during the war, were revived.  Many co-ops sprang up to
distribute rationed food; there was a serious shortage of all
goods.  However, most of these co-ops broke up when sufficient
commodities returned to the market.  Then in 1948, the Consumers'
Livelihood Co-operative Society Law (hereafter referred to as the
Consumer Co-op Law) was enacted, and in 1951 the Japanese
Consumers' Co-operative Union (hereafter referred to as JCCU) was
established, creating the foundation for later co-op development.

In step with the economic revival of Japan in the 1950s, many
labor-oriented consumer co-ops, insurance co-ops, and labor banks
were established for the welfare of workers.  However, labor unions
took the initiative in setting up many of them, so that the worker
members were indifferent to the co-op operations, which often led
to financial difficulties.

In order to improve this situation, reorganization policies were
discussed.  The importance of each member using the co-op and at
the same time being involved in its management was pointed out.
And the policy to make HAN, or small groups, the basic
organizational unit was officially adopted and put into practice.
This meant that the organization of co-ops would be based on HAN
made up of five to ten members.  This system made it possible for
members to co-operate and exchange opinions among themselves
through joint purchase activity, and helped promote communication
within the co-op.  These moves established the democratic
constitution of the co-op movement.

During the 1960s and 1970s, Japan enjoyed a high economic growth,
which was accompanied by many problems that threatened consumers.
Additives had made possible the mass production of food, but they
caused health problems; and waste water and smoke from factories
brought about serious environmental pollution.  Under these
circumstances, co-ops attracted many consumers since they developed
and supplied alternative products under the slogan of safe and
reliable goods.  Then came the oil crisis in 1973, bringing a
shortage of commodities and skyrocketing prices.  Co-ops supplied
goods at reasonable prices to members, which boosted confidence in
co-ops, and led to an increase in membership and a remarkable spurt
of growth.

However, this development was accompanied by anti-co-operative
actions by minor retailers, especially in the 1980s when we were in
the midst of favorable growth.  Minor retailers in financial
difficulties owing to the encroachment of big retailers, insisted
that co-ops were the cause of their troubles, and petitioned the
government to prevent co-op stores from opening and to enforce
member utilization (The Consumer Co-op Law prohibits the use of
co-ops by nonmembers).  The government finally organized a special
committee to discuss appropriate activities for co-ops.  We
maintained that we were acting in the interest of consumers in
accordance with the Consumer Co-op Law and that the true cause of
the financial difficulties of minor retailers was not us.

Arguments continued for a year, after which the government
committee concluded that co-ops played an important role as
consumers' countervailing power; thus the social raison d'etre of
co-ops was officially confirmed.

Co-ops overcame these difficulties one by one, and today have a
membership of 14 million (Local retail co-ops alone account for
about 9 million households, representing 20 percent of all Japanese
homes) and yearly sales of $52.7 trillion.  We are now the largest
consumer organization in Japan.  Medical co-ops try to maintain the
health with an emphasis on preventive medicine and work for
members' participation in the management of co-ops, with the aim of
providing medical services based on a patient's needs; insurance
co-ops guarantee the livelihood of workers through their
users-first policy; co-ops, including those for universities,
schools, work places, and housing now have considerable social
influence.  Co-ops, having an established presence in society, have
recognized their responsibilities, and are making an effort: to
coexist and co-prosper with minor retailers (instead of vying with
them); to re-vitalize the local economy; and to contribute to the
betterment of the community.

In Response to Demands for Safe and Reliable Goods The most popular
motive for becoming a co-op member in Japan is the desire to get
safe and reliable goods.  Ninety percent of co-op members are
women, and most of them are housewives with growing children.  They
purchase CO-OP brand products because they want to have safe food
for their children.  In order to respond to members' concerns, JCCU
and member co-ops have made a strong effort to develop their own
products that do not contain unnecessary additives and harmful
substances.  We have also tried to put accurate and
easy-to-understand information on products.

Lately, farm fresh products, sent directly to members without going
through the market, are becoming increasingly popular.  This
producer-consumer direct transaction resulted from the pursuit of
safer and fresher food.  Farm fresh goods are strongly supported by
co-op members, since it is possible for them to communicate with
the producers and it is clear how these foods are produced,
allowing members to gauge safety for themselves.  The proportion of
farm fresh foods to all the products co-ops provide is increasing
every year.