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This study gives a theoretical explanation to why the slaughtercooperative Swedish Meats demutualized in 2007. The hypothesis is that theproblems related to the vaguely defined property rights of the cooperative raisedthe members’ agency costs to an extent that these costs exceeded the members’perceived benefits from trading with the cooperative. To test this hypothesis,interviews with key stakeholders in the former Swedish Meats were conducted.The findings indicate that the problems of vaguely defined property rights madeit impossible for the members to improve the cooperative’s profitability. Due topoor member governance, urgent long-term investments, for instance inmarketing and product development, were not undertaken. Additionally, thepersistently low profitability caused members to leave the cooperative, wherebyeconomies of scale in the production could not be attained.
