Unicorn Grocery, a worker co-operative wholefood store in South Manchester, is pioneering other ways of buying land. It opened in 1996 in premises leased from a private landlord, but a few years on the landlord decided to sell up. Unicorn wanted to buy the premises itself, but didn’t have the money, so they issued loan stock.
Issuing loan stock involves offering people the chance to lend the organisation money on similar terms for a number of years. So, Unicorn offered loan stock to its customers, raising £350,000. People could choose their own interest rate, from 0% to 6%. As Rob Alderson at Unicorn explains, “some people chose to receive no interest on the loan; others chose more. The average is around 3.5%,” perhaps reflecting the fact that investors are not just interested in financial but also social return.
Unicorn has repaid the second set of loans, and in 2008 raised a further £200,000 from its customers to buy land to grow affordable, local & organic produce. It is now the proud owner of 21 acres of prime growing land in Glazebury, 14 miles to the west of Manchester.
“We decided to buy land in our locality so that we can have a secure supply of organic veg for the long term,” says Rob Alderson. “After 12 years of successful trading and working closely with farmers we are in a great position to go ahead with this project. We know what produce the shop needs and our customers value greatly the benefits of a local, fresh, affordable supply.”
“We sell the freshest, most affordable produce around and year on year have increased our regional supply of organic produce. To feed a city in a sustainable way we need more growing land near the shops that sell the food – it’s simple.”
Unicorn has a flat hierarchy and is owned and run by the workers. So, whereas a community share issue puts the investors in charge, with a loan stock scheme the investors are just loaning the co-operative money, so the co-operative’s members retain control.
Like a community share issue, though, a successful loan stock issue requires specialist advice and a good business plan. And, as Rob says, “it is only because Unicorn has a very firm place in the local community that it can get such a generous response.”
Rob explains that it could work elsewhere. “Although there isn’t one model, if there are co-operatives with local support then a loan stock issue will help them buy land that can then be used for sustainable agriculture.”