FAQs

A cooperative is a member-owned and controlled business from which benefits are derived and distributed equitably on the basis of use. Think of Fonterra, our largest company and responsible for around 30% of the world’s dairy exports. Its farmer-shareholders provide milk to the co-op, which processes and markets it before returning back profit in the form of a Farmgate Milk Price of $x per kilogram milk solids. Cooperatives operate similarly to other businesses but they have a number of unique characteristics, democratic ownership being one.

A mutual is a private company owned by its clients or policyholders, where the primary purpose is to provide mutual benefits to its members rather than generating profits for external shareholders. Mutuals are most commonly found in the finance and insurance sectors, for example SBS Bank and Southern Cross Health Society. All mutuals are cooperatives, but not all cooperatives are mutuals.