Canada Bread fined $50 million for bread price fixing, Competition Bureau turns to grocers

Bakery giant Canada Bread Co. has been fined $50 million after pleading guilty to his role in a criminal price-fixing scheme that drove up the price of bread in Canada for years.

It is the largest price-fixing fine ever imposed by a Canadian court, the Competition Bureau of Canada said Wednesday.

The settlement is an important milestone in the competition watchdog’s ongoing investigation into alleged bread price fixing in Canada.

It’s because record food prices are fueling consumer discontent with Canada’s food industry and fans’ distrust of grocers.

It also highlights the Competition Bureau’s ongoing investigation into the role of other companies, including Metro, Sobeys, Walmart Canada, Giant Tiger and Maple Leaf Foods.

“Putting the price of bread – a staple food of Canadian households – was a serious crime,” competition commissioner Matthew Boswell said in a statement.

“Our ongoing research remains a top priority,” he said. “We are doing everything we can to prosecute those who engage in price fixing.”

Canada Bread, now a subsidiary of Mexico-based Grupo Bimbo, pleaded guilty to four counts of price-fixing under the Competition Act.

The bread maker admitted that it had made agreements with its competitor, Weston Foods (Canada) Inc., to raise prices on several bagged and sliced ​​bread products, such as sandwich bread, rolls and hot dog buns, the Competition Bureau said.

The price fixing resulted in two price increases, one in 2007 and one in 2011, it said.

At the time of the price fixing, Canada Bread was owned by Maple Leaf Foods.

Grupo Bimbo said it is considering “all legal options against those responsible”.

Maple Leaf Foods did not immediately respond to a request for comment.

“Under new ownership, Canada Bread is committed to being a responsible partner to our valued customers and making bread an accessible and reliable source of food for Canadians,” said Alice Lee, Vice President of Canada Bread, in a statement. declaration.

“We are pleased to have resolved this issue and look forward to building on our investments in Canada.”

Nutritionist Sylvain Charlebois pointed out that it took an international company to acknowledge the misconduct in Canada’s food industry.

“The paradox in all of this is that we needed a Mexican company to clean up Canada’s food industry,” said Charlebois, a professor of food distribution and policy at Dalhousie University. “No one in Canada wants to plead guilty.”

He added: “The investigation is not over. More questions will be asked and Canadians will want more answers.”

The Competition Bureau began investigating alleged anti-competitive agreements between competitors in January 2016 to either fix the price of fresh commercial bread.

The investigation became public in 2017 when the first search warrants were executed.

Weston Foods and Loblaw Cos. Ltd., both subsidiaries of George Weston Ltd. at the time, had previously admitted to taking part in an “industry-wide price fixing” that involved coordinating retail and wholesale prices for bread.

In exchange for their cooperation, the companies were granted immunity from prosecution.

The Competition Bureau alleged in court documents in 2018 that at least $1.50 was artificially baked into the price of a loaf of bread during the 16-year-long bread price fixing conspiracy involving the country’s largest bakery wholesalers and grocery stores.

Experts say the scandal has given Canadians good reason to be skeptical about the cause of the high food prices in recent months, especially as grocers are making significant profits.

This report from The Canadian Press was first published on June 21, 2023.

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