More than 200 jobs will be lost because of Calgary Co-op’s decision earlier this year to switch food distributors, says the organization that lost the contract.
Federated Co-operatives Limited (FCL) says it will close its food distribution centre in Calgary in April 2020 because of Calgary Co-op’s move to source its food from rival Save-On-Foods.
“We’re deeply saddened by this avoidable development,” said FCL executive vice-president Vic Huard in an email.
“In a city that’s already experiencing significant economic challenges, Calgary Co-op’s decision has led to more jobs being lost, and more families facing challenges. By aligning itself with a competitor, Calgary Co-op has directly and negatively impacted our employees, their families and Calgary’s economy.”
FCL says products for other co-ops in Alberta and B.C. will gradually be shipped through other FCL warehouses in Edmonton and Saskatoon.
The Saskatoon-based co-operative says the loss of Calgary Co-op from the distribution network will result in a $400-million reduction in FCL’s revenue.
Through a co-operative system among FCL and 170 affiliated local co-ops across Western Canada, FCL returns millions of dollars in profit back to local co-ops each year to be so shared with their members.
Over the past five years, Calgary Co-op has received $186.4 million in profit sharing from FCL, the organization says.
“Calgary Co-op members have contacted us asking how this decision to move to a competitor happened without Calgary Co-op’s members being consulted,” Huard said.
“That’s not something we can answer — it’s really a question they need to ask the CEO and board of the co-op that they, as members, own.”
Calgary Co-op CEO Ken Keelor says he realizes it’s a tough situation for many people.
However, he says the decision to work with Save-On-Foods was seen as better for product assortment, competitive prices, quality and freshness.
“We feel for anyone experiencing a loss of job and being affected personally,” he said. “We are positioning our business for the long term. Our focus is very much on making sure we are financially viable. That’s our No. 1 responsibility to those member owners.”