Canada Bread Was Fined $50 Million In A Price-Fixing Scheme & Loblaws Was Involved

In what's being called the most high-profile price-fixing scheme to ever reach a Canadian courtroom, Canada Bread has been fined $50 million for its role in inflating the prices Canadians paid for bread, and the investigation revealed that Loblaws was also involved.

Canada Bread pleaded guilty in court on Wednesday to four counts of price-fixing, which resulted in the wholesale price of fresh commercial bread being increased twice — once in 2007 and again in 2011.

In a statement from the Competition Bureau Canada, the penalty was referred to as the "highest price-fixing fine imposed by a Canadian court to date."

So, how exactly was Loblaw involved in this?

In its guilty plea, Canada Bread admitted this scheme was arranged with its competitor, Weston Foods, to increase the prices of various bagged and sliced bread products, including sandwich bread, hot dog buns, and rolls.

At the time of this arrangement, Loblaw Companies Limited and Weston Foods were both subsidiaries of George Weston Limited. Both companies admitted to being involved in a price-fixing scheme which involved "the coordination of retail and wholesale bread prices" back in 2017.

Canada Bread was then owned by Maple Leaf Foods, but the senior leadership involved in this scheme is reportedly no longer with the company.

With both companies under investigation by the competition bureau, Loblaw and Canada Bread have been rewarded for their cooperation.

"The Competition Bureau recommended to the Public Prosecution Service of Canada that Canada Bread receive leniency in sentencing in return for its full cooperation with the Bureau’s investigation," read the release from the Competition Bureau. "The fine represents the maximum applicable under the law, less a leniency discount for Canada Bread's cooperation and guilty plea."

As for Loblaw, the three companies tied to the grocery chain all received immunity from prosecution in exchange for their "full cooperation."

"Fixing the price of bread, a food staple of Canadian households, was a serious criminal offence. Our continuing investigation remains a top priority," said Matthew Boswell, the commissioner of competition, in a statement. "We are doing everything in our power to pursue those who engage in price-fixing.”

The ongoing investigation is focused on further allegations of price-fixing between bread producers as well as grocery stores, who are facing accusations of price-fixing to raise retail prices.

So far, the Competition Bureau has executed search warrants against Canada Bread, Weston, Loblaw, Metro, Sobeys, Wal-Mart Canada, Giant Tiger, Overwaitea Food Group Limited, and Maple Leaf Foods Inc.

With Loblaw the only company to have received full immunity, it is the only one not named in a list of grocery chains that are still being investigated for alleged price-fixing, despite the anger directed against the brand and its outgoing President Galen Weston Jr. for its high prices.

So perhaps the grocery chain has been involved in something sketchy, but because the company has been granted immunity from prosecution, we may never find out exactly what happened.

This article's cover image was used for illustrative purposes only.