Delegates to Atlantic Canada’s biggest co-operative have approved a proposal to divest its way out of the grocery and fuel business.
Co-op Atlantic’s board of directors last month rolled out a proposal in which the organization would make a deal with Nova Scotia-based grocery giant Sobeys for the co-op’s food- and fuel-related wholesale and retail assets.
The board’s now-ratified proposal calls for it to negotiate a deal in which Sobeys would buy the “majority” of Co-op Atlantic’s corporate-owned food and gas retail sites — and Co-op Atlantic’s wholesale assets, which serve the Valufoods grocery and RiteStop convenience store chains.
An undecided number of the “corporate” stores operated by Co-op Atlantic would be sold — but stores owned by Co-op Atlantic’s local-level member co-operatives would remain co-ops, the organization said.
“This decision by member-owners is the best option to ensure the long-term viability of the close to 60 independently owned co-op member stores across the region,” Bryan Inglis, Co-op Atlantic’s interim CEO, said in a release Wednesday.
The independently-owned local co-ops’ stores, he said, will thus have to find new wholesalers to provide their products — and Sobeys, he noted, has already been meeting with each of those co-operatives “to potentially enter into a wholesale agreement.”
Moncton-based Co-op Atlantic said Wednesday it’s also launched a “full review” of its other lines of business.
Those include its agriculture division, which operates under the Co-op Country Stores banner and deals in feed, seed and farm equipment as well as horse and pet foods and supplies. Co-op Atlantic operates four feed mills in Atlantic Canada and brokerages to buy feed inputs from farmers in the region.
Co-op Atlantic’s agriculture business also invests locally through its Atlantic Tender Beef program and buys vegetables and other produce from farmers in the region.
Co-op Fuels and Petroleum, meanwhile, supplies gas and diesel products, home heating fuel, heating equipment, lubricants and related products to Co-op Atlantic’s farmer members.
Co-op Atlantic also operates 11 Medicine Shoppe pharmacies in Atlantic Canada, and has a real estate arm, Avide Developments, which provides design/build and property development services and operates APHL (Atlantic Peoples’ Housing).
Once Co-op Atlantic’s reviews of those divisions are complete, the co-op said it “will be in a better position to determine next steps.”
It’s not yet known, Co-op Atlantic said, how many jobs will be affected in a sale of food and gas assets, or when those jobs would be affected.
“The timing of that impact will be determined following the completion of the proposed purchase and sales agreement,” the co-op said. It’s expected to take “a number of months” for Co-op Atlantic to complete that deal and exit the businesses in question.
Job losses, Inglis said, will be “the toughest aspect of the accepted recommendation by member-owners,” but Co-op Atlantic plans to provide affected staff with counseling and resource services “to assist them in finding a new opportunity.” — AGCanada.com Network