Canadian Court Orders Canada Bread to Pay Canadian Dollar 50 Million in a Price Fixing Settlement

Canadian Court Orders Canada Bread to Pay Canadian Dollar 50 Million in a Price Fixing Settlement

Bakery giant Canada Bread Co. has been fined Can $50 million after pleading guilty to its role in price-fixing scheme that inflated the price of bread in Canada for years.

The fine is the highest ever imposed by a Canadian Court for price-fixing.

The settlement is a significant milestone in the competition watchdog's ongoing investigation into alleged bread price-fixing in Canada. In a statement, the Competition Bureau said that the company admitted before the Court to colluding with its competitor, Weston Foods, to raise the prices of various breads such as sandwich bread, hotdog buns and rolls.

The Bureau flagged out that the price-fixing scheme resulted in two price increases, one in 2007 and another in 2011.

“The scheme inflated prices as far back as 2007. At the time, Canada Bread was owned by Maple Leaf Foods, but was sold for Can$1.8 billion (US$1.4 billion) in 2014 to Mexico-based Grupo Bimbo, which said it only learned about it when an investigation was launched in 2017,” added the Bureau.

Canada Bread is presently a subsidiary of Mexico-based Grupo Bimbo, pleaded guilty to four counts of price-fixing under the Competition Act. At the time of the price-fixing arrangement, Canada Bread was under the ownership of Maple Leaf Foods.

The case dates back to January, 2016 when the Competition Bureau began probing alleged anti-competitive agreements between competitors to 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 their participation in an ‘industry-wide price-fixing arrangement’ involving the co-ordination of retail and wholesale bread prices.

In exchange for their co-operation, the companies received immunity from prosecution.

In 2018, the Competition Bureau alleged before the Court that approximately $1.50 was artificially baked into the price of a loaf of bread during the 16-year bread-price-fixing conspiracy involving the country's largest bakery wholesalers and grocery retailers.

Matthew Boswell, Commissioner of Competition in his statement said, “Fixing the price of bread - a food staple of Canadian households - was a serious criminal offence.”

“Our continuing investigation remains a top priority, we are doing everything in our power to pursue those who engage in price-fixing,” he added.