1995: Bankruptcy of Konsum

The retail chain Konsum Österreich was formed in 1978 by merging the majority of the country’s consumer cooperatives. The merger was preceded by economic difficulties at several local cooperatives. It was hoped that these problems could be overcome through the synergy effects expected from the merger. However, these ambitious expectations could not be met as the company increasingly fell into financial distress as a result of the absence of a clear entrepreneurial strategy, lack of rationalisation and due to managerial errors. Not even a cooperation with the Swiss consumer cooperative Migros, which joined Konsum in 1993, could improve economic conditions. After final consolidation attempts had failed in the face of resistance from the banks, the company was in debt over 17 billion shillings. On March 31, 1995, it declared insolvency. As a result, the business activities of Konsum Österreich had to be discontinued and business assets were systematically recovered, whereby the branch network and the manufacturing companies were taken over by their former competitors.

During the settlement, a relatively high quota was reached for creditors at 55%. Thus, bankruptcy, whereby all of the circa 700,000 cooperative members would have also been liable for twice the amount of their business share, could be avoided. The consumer cooperatives that remained independent in 1978 were unaffected by these events and only in the 2000s did they merge with other companies. Konsum Österreich was never liquidated and is still active today in food retail under a different company name.