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August 23

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Top Stories

Pugwash Coop Votes to Sell to Sobeys
Bill Martin
/ Categories: News

Pugwash Coop Votes to Sell to Sobeys

A large and emotional crowd reluctantly agreed tonight to dissolve the Pugwash Co-operative and sell its assets to Sobeys.

The Catholic church hall was filled to overflowing causing a delay in the start of the meeting as coop members registered their right to vote.

Sobeys became involved with the local coop when it succeeded Coop Atlantic as the wholesale supplier. The local store was adopted into the Sobeys Foodland program with its pricing and promotional programs.

With tonight’s vote, Sobeys will seek a franchisee to take over the facility as a Foodland store.

The move may have been precipitated by the Nova Scotia Liquor Commission (NSLC) which proposed expansion and a new lease for its attached Pugwash outlet.

The coop board realized their store was aging and in need of numerous upgrades in order to keep pace with the changing demands of the grocery business.

The board postponed the coop’s annual meeting in May of 2018 and began to look at the cost of expansion and improvements for the NSLC and the grocery operation. By November they realized they would likely have to borrow, perhaps as much as two million dollars to effect the required changes.

Despite rising sales and margins under the Sobeys program, the board feared plunging the membership into such onerous debt. They also feared the .5 percent profit margin would make it difficult to find a lender.

They decided to ask Sobeys if they could find a franchisee to take over the Pugwash operation. Not only did Sobeys say yes, but they also presented an offer, in late May, to purchase the assets of the coop which led to the meeting tonight seeking approval from the membership.

Sobeys offered to purchase the land and building for $557,460.00. They would also buy the equipment, currently estimated at $54,540.00 and inventory of about $223,129.00 which would be adjusted at the time of closing.

The net proceeds would be distributed among the 2200 coop members or those who can be identified as members. Given the coop’s 73 year history, some members have died while others have dispersed across the country or beyond.

There is one main wrinkle in the discussion which brings us back to the NSLC. The Commission has the first right of first refusal on two fronts. The provincial outlet could opt to match or exceed the Sobeys offer, or it could object to Sobeys assuming their lease. In either scenario, the Sobeys deal is off and the coop would continue to operate as usual. The NSLC was just advised of the offer and will have thirty days to respond.

Concern for the Community

Three main issues arose during the emotional discussion: concern for a continued commitment to community fundraising and involvement; a desire that none of the existing staff lose a job; and that there be some commitment to keeping a grocery store in Pugwash for the long-term.

Sobeys representative Lori Rhyno, who has worked with the coop as the supervisor of stores on the north shore, says “We want a store in Pugwash. If we didn’t, then we wouldn’t be here with this offer tonight.”

Rhyno said everything currently offered through the coop will be offered through a Foodland store. She says, “Foodland is really about community.”

Rhyno assured the audience that every member of the current staff would be offered a position with the new store at the same rate of pay, with the same benefits and seniority.

The only member of the staff who will leave is Steve Arkens the current manager. Rhyno said this is typically because a franchise operator is usually the owner-manager.

An audience member said, “You are losing a great leader,” prompting a round of applause.

Sobeys Commitment to the Future

The Sobeys plan calls for renovations and expansion after a new franchise operator gets settled. Rhyno says Sobeys would undertake that work and not burden the franchisee with such costs.

Board member Bill Mundle says this decision did not come easy. He said, “When you look at our undertakings to succeed and continue to succeed it would cost us two million dollars. I would not want to be part of any board that would put us in such debt.” He added, “I don’t like it, it breaks my heart.” He added, “I believe the decision we have made is the best for this community and we will continue to have a store.”

No Easy Vote

The decision of the members present required a two-thirds majority, 81 votes to pass. After a couple of fumbled attempts to count raised hands and standing voters, they collected ballots which were counted by the coop’s auditor. The motion to sell the property and assets to Sobeys was approved 84 to 33. The subsequent motion to disband the coop was approved with a single dissenting vote.

The current board of directors will continue the negotiations to completion with an anticipated closing date set for September 8th.

Add your comments below.

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9 comments on article "Pugwash Coop Votes to Sell to Sobeys"

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Helen Dawson

Co OP prices are high enough now . Wait till sobeys takes over.


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Cheryl Ann Angus

The big guy wins again.


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Peggy Walt

My Mom is a Coop member, and we were not contacted at all about this meeting. How do we get her name on the list?


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Kim Tower

That is too bad


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Wendy Brooks

I believe that all members should have received a letter in the mail. I dont think all members were aware of this. Seems like this want handled very well


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Joanne Kewachuk

I wasn't emotional so much as stunned by the audacity of this board. They chose not to have an AGM in 2018, keeping this membership completely in the dark. This is the first I am hearing that our board is wide open to personal liabilities, a matter that is usually resolved with director's insurances. We got so very little information last night, and no time to process it, that the whole thing felt like shady backroom dealings.


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Nancy Burgess-Graham

I would like to take a moment to acknowledge the hours of work the Co-op board members have obviously put in over the last weeks to sort thru all the policies and procedures required of them to bring this issue to the meeting last night. For those who are not involved in owning or running a business, the board of directors of a business, whether it is a co-operative or not, are bound by confidentiality and non-disclosure rules. This board has worked to explore all the facts and options to recommend a way forward to the community, to have the best quality store to meet the changing needs of us, as consumers and to best position the store for success and hoped longevity. I could tell that no one sitting up front took their work lightly or did not feel the full weight of what they were recommending. Businesses do not do public consultations like governments.

A corporation like Sobeys Inc has the resources to update and upgrade our store...this is their core business. And someone, as a franchisee, will have the opportunity to be a new business person in the community. Another perspective to consider is that as employees of Sobeys Inc, the staff will have access to opportunities that only a big company can offer. Yup, change can be scary, but it also can be good...if we want a strong service and amenities base in our community, we need to grow into it... one tough decision at a time.


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Mark Rushton

Nancy - I think this is where folks have a disconnect. "the changing needs of us, as consumers" - Co-op members were *owners* and with a democratic input into the actions of their community store.

With Sobeys they become just another consumer, with no control - apart from to buy or not to buy, which in a community with no other grocery store is really no choice at all.


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Mark Rushton

On the basis of the information posted here, it's hard to fault the board for not wanting to take the risk of adding debt to the membership. That said... the orchestrated destruction of co-operativism throughout the Atlantic Region is tragic. Once more, local money will be turned into profits that are extracted from the community, rather than returned to the local economy. "Foodland is all about community" - a great line, but entirely untrue. Sobeys is a profit-making corporation, full stop.

The Co-op Atlantic sellout to Sobeys four years ago was the first step. Once you exit the market, gaining a foothold again in the future against monopolistic companies is nigh-on impossible.

Just as the opening of a Wal-Mart in a community is economic suicide for local businesses, this move to sell assets and cede the market to Sobeys will have long-term negative effects. A handful of jobs "protected" (will Sobeys recognize years of service? Pay similar salaries? Offer similar benefits?) matters little in the larger picture.

Woe the Co-op.

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Events This Week

Friday, August 23, 2019 6:00 PM

Fun Night at the Malagash Legion. Pass the Ace, Jig the Joker, and board games.

Saturday, August 24, 2019 3:00 PM

Chase the Ace at the Pugwash Legion. Click HERE for details.

Sunday, August 25, 2019 1:00 PM

Open House at the new Pugwash Harbourfront Centre in Eaton Park. Tour the new facility and enjoy a concert from 2 to 3 pm.

Sunday, August 25, 2019 1:30 PM

Dancing to Live Music at the Wentworth Community Centre. Click HERE for details.

Sunday, August 25, 2019 3:00 PM

Gospel in the Park at the Pugwash Harbourfront Centre with music by 'For the Master'. In the event of rain, go to Pugwash Baptist Church.

Sunday, August 25, 2019 7:00 PM

Bingo at the Northport Community Centre.

Monday, August 26, 2019 10:00 AM

Rug Hooking at Northport Community Centre.

Monday, August 26, 2019 10:00 AM

Walk 'n Talk at the Wentworth Community Centre. Click HERE for detail.

Tuesday, August 27, 2019 10:00 AM

Quilting at the Northport Community Centre.

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