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Loblaw Cos. Ltd. and its parent company George Weston Ltd. say they have agreed to pay $500 million to settle a class-action lawsuit regarding their involvement in a bread price-fixing scheme.
‘This should have never happened,’ CEO Galen Weston says in apology
The Canadian Press
· Posted: Jul 25, 2024 7:37 AM EDT | Last Updated: 8 hours ago
Various brands of bread sit on shelves in a grocery store in Toronto in a 2017 file photo. Loblaw Cos. Ltd. and its parent company George Weston Ltd. say they have agreed to pay $500 million to settle a class-action lawsuit regarding their involvement in a bread price-fixing scheme. (Doug Ives/The Canadian Press)
Loblaw Cos. Ltd. and its parent company George Weston Ltd. say they have agreed to pay $500 million to settle a class-action lawsuit regarding their involvement in a bread price-fixing scheme.
The class-action case was brought against a group of companies that includes Loblaw and the Weston companies, Metro, Walmart Canada, Giant Tiger, and Sobeys and its owner, Empire Co. Ltd.
The plaintiffs allege those companies participated in a 14-year industry-wide price-fixing conspiracy between 2001 and 2015, leading to an artificial increase in packaged bread prices.
George Weston will pay $247.5 million in cash, while Loblaw will pay $252.5 million, made up of $156.5 million in cash and credit for $96 million previously paid to customers by Loblaw under the Loblaw Card program.
Loblaw chair Galen Weston, who is also chair and chief executive of George Weston, apologized on behalf of the companies.
“This behaviour should never have happened,” said Weston. “We have the privilege of serving Canadians from coast to coast. That privilege needs to be earned each and every day. Reaching a settlement on this matter was the right thing to do in response to previous behaviour that did not meet our values and ethical standards.”
WATCH l Breaking down Canada Bread’s fine, and the steps to come (2023):
Breaking down the Canada Bread price-fixing scandal | About That
Canada Bread must pay a $50 million fine for being part of a scheme to fix the price of bread in Canada over 14 years. It’s the highest fine the Competition Bureau has ever levied. Andrew Chang explains how the scheme worked, and why this may only be the beginning.
Metro, Sobeys fight allegations
Lawyers representing the plaintiffs say the payout, subject to court approval, is the largest antitrust settlement in Canadian history.
“This is a significant milestone in Canadian class action history and sends a strong message that conduct that harms consumers will not be tolerated,” said Jay Strosberg, managing partner of Strosberg Wingfield Sasso LLP, in a separate news release.
The lawyers said their focus will now shift to preparing for trial in the ongoing class actions against Canada Bread, Sobeys, Metro, Walmart Canada and Giant Tiger.
The Competition Bureau began investigating alleged bread price-fixing in January 2016. Weston Foods and Loblaw, both subsidiaries of George Weston at the time, had previously admitted their participation in an “industry-wide price-fixing arrangement” and received immunity from prosecution in exchange for co-operating.
At least $1.50 was added to the price of a loaf of bread during the 16-year conspiracy, the bureau alleged in court documents.
Loblaw offered $25 gift cards to customers in early 2018 amid the fallout from the price-fixing schemes. (Evan Mitsui/CBC )
Galen Weston said Thursday that the company “discovered and self-reported” the price-fixing behaviour in 2015.
In June 2023, Canada Bread was fined $50 million after pleading guilty to four counts of price-fixing bread products under the Competition Act. The Competition Bureau called it the highest price-fixing fine ever imposed by a Canadian court.
In its statement of defence in the class action file last October, Canada Bread denied participating in a wide-ranging conspiracy to fix the price of bread, and denied profiting from the alleged conspiracy or from the price increases it admitted to.
Metro submitted a statement of defence and cross-claim to the Ontario Superior Court late last year accusing Loblaw and George Weston of conspiring to implicate the rival grocer.
Metro denied being involved in bread price-fixing and accused the companies of trying to spread the blame across the industry and avoid public perception that Loblaw was the sole retailer involved in price-fixing.
WATCH l Independent grocers, co-ops feel left out over proposed changes:
Canada’s government is trying to lower food prices. Experts say they’re focused on the wrong things
Food industry experts say the federal government should be focusing on local initiatives to increase competition and lower food prices in the grocery sector.
Sobeys also filed a statement of defence and crossclaim in the class action and has said it was falsely implicated.
Walmart Canada has also denied conspiring to fix the price of bread or violating the Competition Act, while Giant Tiger said it did not participate or know about the alleged conspiracy.
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