Meet the country townspeople who worked together to save their pubs

These towns’ residents couldn’t bear the thought of a pub with no beer, so they banded together to keep their local businesses open.

SEA Lake’s top pub has booked Cupid for Valentine’s Day, hoping to stir romance at its singles night upstairs on the balcony.

It’s the latest event the community co-operative that owns the Mallee town’s pub is putting on to create value for locals who pooled $600,000-plus to buy, restore, re-open and run the place after it sank into structural and financial ruin.

Among them was a new generation of young male “succession” farmers.

“We’re doing things all the time to get people in because we’re very conscious that we are using other (local) people’s money so we want to make it work,” Sea Lake Hotel Co-operative Limited secretary Alison McClelland says.

MORE MIRANDA

Community co-operatives like this, and other forms of shared community ownership that keep profits local and share risk locally, appear to be gaining popularity in rural Victoria as a way for towns to keep local businesses open and viable. And I wonder whether they might have some role to play as communities rebuild after fire.

In the case of the Sea Lake Hotel Co-operative Limited, 42 shareholders including locals and about 10 ex-pats — a Geelong oncologist born on the site next door to the pub is one — contributed minimum lots of $5000.

At first, interested locals formed a company to buy the rundown pub for $180,000 at a mortgagee’s auction in November 2018.

But the desire among locals to buy into the venture grew, so the company became a co-operative.

This allowed a larger number of shareholders while avoiding the more onerous regulatory requirements of a company structure under the Australian Securities and Investments Commission, according to Swan Hill’s Brent Thomson of the GMG Financial Group whose portfolio of towns and communities seeking advice on how to set up and run co-operatives is growing.

“You can set up a company, but once you get more than 20 shareholders, you have a lot more hoops to jump through under ASIC,” Brent says.

Under model rules, the co-operative can decide whether it will be a distributing co-operative or non-distributing co-operative (whether it will return dividends to shareholders or not).

At Nandaly, also in the Mallee, the 100 or so shareholders in the community-owned pub don’t expect dividends.

Instead the Nandaly Community Hotel Co-operative Limited has deemed that, should the pub ever be sold and if there are profits, they will stay local and be returned to the Nandaly Progress Association.

“What we really wanted was (to get) our pub back, we weren’t interested in getting any gains other than (having) the service,” says volunteer co-op secretary and treasurer, Dione McGarry. She’s among many who voluntarily organise bar rosters, refill gas bottles, clean out beer lines and do all that is needed to make the business tick.

Farmer John Clohesy is a shareholder and key driver of the Sea Lake Hotel Co-operative Limited and another community-owned co-operative that owns the hardware shop in Sea Lake.

“We were sick of people coming into our communities, buying our businesses and then running them into the ground,” John says. “Many of them didn’t know how to run a business or wouldn’t put in the time.”

Curiously the spirit of shared ownership was well lit in Sea Lake. Early last century, a local co-operative running the town’s grocery shop failed and 40 locals formed a company to take it over.

Today that company, which is limited to 40 shareholders, still owns the Sea Lake FoodWorks, with shareholdings having passed down through generations. Robert McClelland, who inherited a shareholding, says it doesn’t matter whether it’s a company or a co-operative. “Good management is the key. I remember my dad having a lot of worries about the grocery store until they got a good manager.”

The latest town to form a co-operative to buy and save its local pub from closure is Lockington.

It reopened under its new community ownership mid last month. The pub had closed twice in the past 10 years and was at risk of remaining closed.

Now 91 shareholders, most of them living locally or with local ties, own it, after collectively contributing $500,000-plus in parcels of $5000.

A voluntary board oversees it. Secretary Sue Stewart is a shareholder and says it’s less about the alcohol and more about having a place for locals to meet and interact socially. Chairman local dairy farmer Terry Malone hopes that eventually profits will be returned to shareholders.