The Demutualization of a Cooperative - Swedish Meats

Lena W. Lind

No 114382, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: This study gives a theoretical explanation to why the slaughter cooperative Swedish Meats demutualized in 2007. The hypothesis is that the problems related to the vaguely defined property rights of the cooperative raised the members’ agency costs to an extent that these costs exceeded the members’ perceived benefits from trading with the cooperative. To test this hypothesis, interviews with key stakeholders in the former Swedish Meats were conducted. The findings indicate that the problems of vaguely defined property rights made it impossible for the members to improve the cooperative’s profitability. Due to poor member governance, urgent long-term investments, for instance in marketing and product development, were not undertaken. Additionally, the persistently low profitability caused members to leave the cooperative, whereby economies of scale in the production could not be attained.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 11
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114382

DOI: 10.22004/ag.econ.114382

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