Metro Inc. (TSX: MRU) has taken legal action against Loblaw Companies (TSX: L), its parent company George Weston (TSX: WN), and subsidiary Weston Foods (Canada) Inc., alleging that Loblaw falsely implicated Metro in a bread price-fixing conspiracy, causing damage to its reputation. The lawsuit was filed in the Ontario Superior Court on Tuesday.
The backdrop to the lawsuit stems from a 2017 investigation by the Competition Bureau into a bread price-fixing scheme. At the time, both Weston Foods and Loblaw Cos. Ltd., subsidiaries of George Weston Ltd., admitted to their involvement in an “industry-wide price-fixing arrangement.” Both companies were granted immunity from prosecution due to their collaboration with the bureau’s investigation.
In the recently filed court document, Metro Inc. refutes any involvement in the price-fixing scheme and maintains that the market for packaged bread in Canada was “competitive” during the period in question. Metro accuses Loblaw and its associated entities of making misleading statements to the public and the competition commissioner, insinuating that Metro was part of the illegal price-fixing conspiracy. According to the claim, Loblaw made these false statements to advance its business “at the expense” of its competitors.
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Metro alleges that by implicating other retailers in the scheme, Loblaw and its parent company aimed to shield themselves from being the only company to face potential legal and reputational consequences. Metro’s lawsuit contends that Loblaw’s actions breached section 52 of the Competition Act, which prohibits the issuance of misleading public statements to promote a product.
Catherine Thomas, a spokesperson for Loblaw, vehemently denied Metro’s claims. In an email statement to BNN Bloomberg, she stated, “Metro’s allegations are simply ridiculous and utterly untrue, as will be made clear in court.”
The claims presented in the lawsuit have yet to be validated in court, and as of now, no evidence has been presented linking Metro to the bread price-fixing conspiracy.
Information for this briefing was found via BNN Bloomberg and the sources mentioned. 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.
