Loblaw and its parent company, George Weston Co., announced that they have agreed to pay $500 million to settle a class action lawsuit over their involvement in a bread price fixing scandal.
The class action lawsuit was filed against a group of companies that includes Loblaw Inc., Weston’s Inc., Metro Inc., Walmart Canada Inc., Giant Tiger Inc. and Sobeys Inc. and its owner Empire Corp.
The plaintiffs allege that over a 14-year period, from 2001 to 2015, the companies participated in an industry-wide price-fixing conspiracy to artificially inflate the price of packaged bread.
George Weston will pay $247.5 million in cash, and Loblaw will pay $252.5 million, consisting of $156.5 million in cash and $96 million in credits previously paid by Loblaw to customers under its Loblaw Card program.
Galen Weston, chairman of Loblaw and chairman and CEO of George Weston, apologized on behalf of both companies.
“This behavior should never have happened,” Weston said. “We have the privilege of serving all of Canada, and that privilege must be earned every day. Reaching a settlement in this matter was the right response to past conduct that failed to meet our values and ethical standards.”
Learn more about CanadaBred’s fine and upcoming actions (2023).
Canada Bread must pay a $50 million fine – the largest fine ever imposed by the Competition Bureau – for its involvement in a 14-year scheme to fix bread prices in Canada. Andrew Chan explains how the scheme worked and why this is just the beginning.
Metro and Sobeys fight allegations
Lawyers for the plaintiffs say the award, which is subject to court approval, would be the largest antitrust settlement in Canadian history.
“This marks an important milestone in the history of class action lawsuits in Canada and sends a strong message that conduct that harms consumers will not be tolerated,” Jay Strosberg, managing partner at the law firm Strosberg Wingfield Sasso, said in a separate news release.
The lawyers said they would now turn their focus to preparing for trial in ongoing class action lawsuits against Canada Bread, Sobeys, Metro, Walmart Canada and Giant Tiger.
The Competition Bureau began investigating the alleged bread price fixing scheme in January 2016. Weston Foods, then a subsidiary of George Weston, and Loblaw had previously admitted to participating in an “industry-wide price fixing” and received immunity from prosecution in exchange for their cooperation.
During the 16-year conspiracy, at least $1.50 was added to the price of a loaf of bread, the FBI alleged in court documents.
Galen Weston said on Thursday that the company “discovered and self-reported” price fixing practices in 2015.
In June 2023, Canada Bread pleaded guilty to four charges of price fixing of bread products under the Competition Act and was fined $50 million, which the Competition Bureau said was the largest price-fixing fine ever imposed by a Canadian court.
In its defense to the class action lawsuit last October, Canada Bread denied any involvement in a widespread conspiracy to fix bread prices and denied profiting from the alleged conspiracy or from the price increments that it approved.
Metro filed an answer and counterclaim in Ontario Superior Court late last year, alleging that Loblaw and George Weston conspired to take down the rival grocer.
Metro has denied any involvement in fixing bread prices and has accused the companies of shifting the blame to the entire industry and trying to avoid the public perception that Loblaw is the only retailer involved in price fixing.
Attention Independent grocers and co-operatives feel left out by proposed changes:
Food industry experts say the federal government should focus on local efforts to increase competition in the grocery sector and lower food prices.
Sobeys has also filed an answer and cross-claim in the class action lawsuit, alleging that the company was wrongly implicated.
Walmart Canada also denies conspiring to fix bread prices or violate competition laws, while Giant Tiger says it has no involvement in or knowledge of the alleged conspiracy.
