I wrote in praise of the 19th century enduring Mutual Societies for Idler magazine in the March/April 2025 edition, mentioning amongst others The Wine Society and The Royal Arsenal Co-operative Society.
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Here’s the essay:
Mutual Friends
What would you do if you found a few wooden vats of Portuguese red wine in the basement? Yes, well thankfully, back in 1874, Major General Henry Scott was a little more scrupulous than some of us and instead of knocking it all back, he did a rather remarkable thing.
The barrels of wine were found in the cellars of the Royal Albert Hall at the end of the Great Exhibition of 1874. The public spectacle was focussed particularly on food and wine, and samples of both were sent by governments all over the world to be showcased at the glittering event. Much to the chagrin of the Portuguese, the organisers forgot to bring their wine out of the cellar to be tasted by the public and a minor diplomatic incident occurred with Portuguese diplomats making a formal complaint to the Foreign Office about this slight to their beloved Douros and Vinho Verdes.
Enter Major General Scott. As the original architect of the Albert Hall, he felt a little embarrassed at this faux pas, and so volunteered to give some separate tastings to likely quaffers who might be encouraged to buy the wine. Over a series of lunchtime tastings, all the barrels were sold off, the Portuguese pride was satisfied and all might have ended there. But on 4th August, the “Committee of Gentlemen” who had tasted and then bought the wine decided, under Scott’s prompting, to form a “co-operative company” to purchase wines for their future enjoyment.
One hundred and fifty years later, The Wine Society (whose legal name remains The International Exhibition Co-operative Wine Society Limited) is celebrating its special anniversary with a whole range of offers for its 240,000 members who, the previous year, spent almost £150 million buying wine. The organisation remains true to Scott’s delightful decision to be structured as a “mutual company”, defined by HMRC as an “organisation owned by, and run for, the benefit of its members, who are actively and directly involved in the business – whether its employees, suppliers, or the community or consumers it serves, rather than being owned and controlled by outside investors.”
Scott and his chums weren’t the only people in the 19th century to consider the “mutual” approach. The Nationwide Building Society (founded 1884) is run for the benefit of its members and indeed, the whole building society movement was a response to what many Victorians saw as the excesses of the capitalist model — much like George Bailey’s Building and Loan in the film It’s A Wonderful Life, supporting poor renters against the evil property magnate Henry Potter.
The Rochdale Pioneers too were hugely influential in the 19th century. A group of 28 working-class men, they founded the Rochdale Society of Equitable Pioneers in 1844. Most of them were weavers and artisans who were struggling with the harsh economic conditions of the time, and with what seems now to be a remarkable spirit of both independence and bravery, they set up a cooperative store on December 21, 1844, selling basic goods like butter, sugar, flour, and oatmeal. Their sole objective was to provide high-quality, affordable goods to their members.
Although they acted as one body with no formal leaders, the Pioneers established what are now known as the Rochdale Principles under the guidance of Charles Howarth and James Smithies. The Principles became the foundation for cooperatives worldwide and included democratic control (one member, one vote), open membership, limited interest on capital, distribution of surplus according to patronage, and education of members. What is so striking is that the aims of the working-class Pioneers were in many ways no different to those of the far more affluent founders of the International Exhibition Co-operative Wine Society. Both sought just outcomes over profiteering.
Civilised Victorians saw the “mutual” model as a way of ensuring that essential services could be accessed by all at a fair price. Take UIA Insurance, set up in 1890 to provide insurance products to members of the trade union movement and other not-for-profit operations. By 2020, UIA Mutual had almost 100,000 members and assets of over £60 million. The Craft Guild of Chefs was formed in 1892 to encourage young men and women to enter the catering trade, and continues as a mutual to this day to that end. William Morris set up the Society for the Protection of Ancient Buildings (SPAB) in 1877 to protect Britain’s built heritage from the ravages of Victorian industrial architects.
So can we learn lessons from the mutual movement today? Wine Society Chief Executive Steve Finlan thinks we can.
“Our business purpose is to champion the joy of good wine and everything follows from that. We don’t pay bonuses to anyone in the organisation, we don’t pay dividends, we don’t have investors. The heat on my collar is not about growth for growth’s sake. We’re not a not-for-profit, we have to make a profit, but the trick is to make just enough, which is actually a surprisingly difficult thing to do.”
In other words, on a turnover of £150 million, he needs to make sure the money is spread around the business with one sole purpose: to allow the Society’s 240,000 members to buy the best wine at the best price.
“Last year,” he says, “the government chose to make the biggest ever duty rise in fifty years which has had a devastating effect on the industry. Most of our commercial competitors were forced to pass that increased duty onto consumers. We decided not to, and held our prices.”
What’s particularly interesting about the ebullient Finlan’s obvious pleasure in his work is that he was recruited five years ago after a very successful career in red-in-tooth-and-claw commercial retailers including Marks & Spencer and Clarks Shoes. He admits:
“It probably took me almost twelve months to unlearn many of the ways of thinking from my career. To be fair, it probably took my new colleagues in the Society the same amount of time to accept some of the commercial principles I had to bring with me.”
So could that model be applied elsewhere? The model in which only the satisfaction of the members of the mutual matters? Let’s have a think: how about the water industry?
Finlan laughs.
“Without question, the mutual model should be looked at more seriously across the board. It’s just a very grown up model, it gives you a much more holistic way of looking at and running a business. The primary difficulty in that is that investment is getting more and more expensive, access to investment is very difficult. So it’s difficult for an organisation like a water company, which may have failed to invest adequately for 20 or 30 years, to suddenly change direction. But it does feel as though business generally needs some kind of reset.”
A cautionary note can be found in the story of another mutual, The Royal Arsenal Co-Operative Society, founded in 1868 in order to ensure that the families of employees of the Royal Arsenal in Woolwich could buy food at a reasonable price. Initially, it began with just twenty workers; by 1975, its membership had reached a staggering 500,000 and the services it provided ranged from food and milk to pharmaceuticals, shoes and even undertaking. Its turnover was over £60 million, yet its “mutual” principles remained the same, the same as the Wine Society holds to today.
Throughout the bulk of the twentieth century, The Royal Arsenal Co-Operative was one of the most important suppliers of goods to working people in the south east of England. What caused its collapse? By the late 1970s, commercial supermarkets such as Sainsbury’s were expanding aggressively and bringing with them new techniques of buying, selling and supplier management. The Co-Operative didn’t have the capital or the commercial acumen to compete and, in 1985, it transferred all its activities to the national Co-operative Wholesale Society. The dream was over.
The Wine Society is fortunate in that it has its own capital reserves in the form of tens of millions of pounds’ worth of en primeur wine stored in its cellars. These have been built up ever since Major General Scott first sipped from the Portuguese barrel. But, as a mutual, it also doesn’t have to orchestrate a flight of capital to some obscure pension fund the other side of the world every time it makes a surplus. Instead, Finlan and his team look at ways of improving the services to members, holding prices, supporting struggling growers in regions where the weather hasn’t been kind. It does all this, while consistently winning Decanter magazine’s Wine Retailer of the Year award against commercial competition.
We should all drink to that. And if you’re wondering where to do that, you could do much worse than pop down to the Peckham Liberal Club in south London, a mutual founded in 1899, whose beautiful wood-lined interior will welcome you seven days a week in an atmosphere of civilised and sociable comfort.
Imagine a world where football clubs, regional water companies, pharmaceutical businesses and all the other strange late capitalist phenomena took the first tentative steps towards mutuality. Pace John Lennon, it may not be easy, but it might be worth trying.