Canada Bread Co., one of the leading bakery companies in Canada, has been handed a record-breaking fine of $50 million for its involvement in a criminal price-fixing scheme that significantly inflated the wholesale price of bread spanning numerous years. The decision, and the largest fine ever imposed by a Canadian court for price-fixing, was announced by the Competition Bureau of Canada on Wednesday.
The fine represents a significant step forward in the Competition Bureau’s ongoing investigation into alleged price-fixing within Canada’s bread industry, and comes at a time when record-high food prices have amplified consumer dissatisfaction with the Canadian food industry and increased distrust of grocery store operators.
In addition to Canada Bread, the Competition Bureau is following the trail of breadcrumbs from other companies such as Metro, Sobeys, Wal-Mart Canada, Giant Tiger, and Maple Leaf Foods, which too, are accused of taking part in the same price-fixing scheme.
Canada Bread, which at the time of the allegations was under the ownership of Maple Leaf Foods but is now a subsidiary of Mexico’s Grupo Bimbo, pleaded guilty to four counts of price-fixing under the Competition Act. The company admitted to collaborating with its competitor, Weston Foods, to inflate prices for a range of bagged and sliced bread products including sandwich bread, hot dog buns, and rolls in 2007 and 2011.
Although Weston Foods and Loblaws Companies Limited— both subsidiaries of George Weston Limited— were also willing partners in the price-fixing scheme, they received immunity in exchange for throwing Canada Bread under the bus and fully cooperating with the Competition Bureau’s investigation. To smooth over Canadians’ frustration with inflated bread prices and deliver a sense of self-serving punishment, Loblaws at the time handed out $25 gift certificates that customers could redeem at their own stores.
Information for this story was found via the Competition Bureau of Canada. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.