Co-operative
Hotel
Graeme Charles
Devenish Community Hotel Co-op Ltd. "If
you want a thing well done do it yourself"
Devenish
Community Hotel Co-operative Ltd. (a Trading Co-operative) Devenish
Tel 03 57
644375
Devenish has a population of
about 120 and is located 30 kilometres north of Benalla in North East Victoria.
Primary Activity: "In accordance with Part 6 of the Act, the operation of a
community hotel is a primary activity of the
co-operative."
Active Membership
Requirements:
"A
member shall purchase an alcoholic or non alcoholic beverage or a meal or other
food, or use meeting facilities at least once over a three year period in order
to establish active membership of the co-operative."
Number of Directors: 5 male
Background to Formation 2000:
After a long period of gradual loss of
just about every business typically associated with small rural towns, by 1999
the only services left operating in Devenish were the general store and the
hotel.
The Devenish Hotel had been owned and operated by the
one family for many years. Due to a combination of circumstances, the family
had attempted, unsuccessfully, to sell the hotel for some time. A local
resident, who later became chairman of the co-operative, "floated"
the idea of a number of people contributing $10,000 each, and purchasing the hotel.
There was not enough response to that proposal. Meanwhile the hotel trade
continued to decline, and for some time the possibility existed, that it might
close its doors for good.
In February 2000 at a meeting of the Devenish Sports
committee, the talk got around, as was often the case at that time, to
"what can we do about the pub?" A brainstorm session resulted which
threw up the notion of forming a co-operative to purchase the hotel. The
suggestion was made that minimum capital per shareholder be set at $1000, to
enable as many residents as possible, to join the co-operative.
A
group of four residents, "the working party", was asked to do some
"leg-work" and research the co-operative idea.
Formation of the Co-operative:
A public meeting was held about a fortnight later
which found enough interested people prepared to commit themselves to
membership of the co-operative and provide the capital required to effect the purchase of the hotel. Formation advice was
sought and received from a local solicitor and accountant.
The Disclosure Statement required from every intending
Trading co-operative, and often used as an excuse for avoiding the co-operative
model, was prepared in the main by the Co-operative's foundation secretary. The
Registry of Co-operatives, and the Yinnar Community
Hotel Co-operative Ltd. also provided great assistance, and the Devenish
Community Hotel Co-operative was formed in June 2000 with 69
member/shareholders contributing various amounts of capital, consisting of a
combination of shares purchased in, and loans made to, the co-operative. This
meant that approximately half the town's population became shareholders.
The nominal value of shares is set at $1, with each
member being required to purchase a minimum
of 1000 shares, partly-paid to 10 cents. Simultaneously, the member is
obligated to lend the co-operative an amount equal to 90% of the nominal
value of the shares purchased. This capital raising approach was suggested by
the co-operative's accountant, citing taxation advantages for members.
While
this was happening the "working party" had negotiated the purchase of
the hotel, on behalf of the co-operative.
Post-formation:
The
co-operative has prepared its own business plan and employed a trainee manager
for the hotel.
Trading figures are consistent with budget
projections. Volunteers drawn from the membership fulfil
a variety of roles, integral to the hotel's operation. Volunteers are likely to be called upon until the hotel's trade
increases its viability. The co-operative's existence has encouraged and
enabled people to discover talents they didn't know they possessed. Another
"spin-off" of the volunteer program has been the development of
community relationships, crossing the traditional groups that friendships and
relationships usually develop in, e.g.football club,
farmer organisations and town versus out-of-town
residents. Those associated with the co-operative say that the success of this
co-operative venture has resulted in people growing in confidence, and having
pride in their collective achievement.
The Board of Directors meets monthly, but
interestingly, the co-operative also conducts monthly shareholder meetings. These
shareholder meetings facilitate communication and build on the
member/co-operative relationship. Generally the shareholder meetings are
attended by anything from 12 to 30 or more members.
The bar has become a big meeting place for the town,
with people who had never before set foot in the hotel now calling in on a
regular basis, not necessarily for a drink, but to support its future in
whatever way they can.
Graeme Charles
First published: The Co-op Start Up Manual, May 2001
Revised: February 2004