December 15th, 2024

Canada Bread fined $50 million for role in bread price-fixing scheme

By Brett Bundale, The Canadian Press on June 21, 2023.

A worker restocks shelves in the bakery and bread aisle at an Atlantic Superstore grocery in Halifax, Friday, Jan. 28, 2022. THE CANADIAN PRESS/Kelly Clark

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

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

The settlement is a significant milestone in the Competition Bureau’s ongoing investigation into alleged bread price-fixing in Canada.

It comes as record food prices fuel consumer discontent with Canada’s food industry and fan distrust of grocers.

It also shines a spotlight on the Competition Bureau’s ongoing investigation into the role of other companies, including Metro, Sobeys, Wal-Mart Canada, Giant Tiger, and Maple Leaf Foods.

“Our continuing investigation remains a top priority,” Matthew Boswell, Commissioner of Competition, said in a statement. “We are doing everything in our power to pursue 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 arranged with its competitor, Weston Foods (Canada) Inc., to increase prices for various bagged and sliced bread products, such as sandwich bread, hotdog buns and rolls, the Competition Bureau said.

The price-fixing resulted in two price increases, one in 2007 and another in 2011.

At the time of the price-fixing arrangement, Canada Bread was under the ownership of Maple Leaf Foods.

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

Food industry expert Sylvain Charlebois pointed out that it took an international company to step up and acknowledge the wrongdoing in Canada’s food industry.

“The paradox in all of this is we needed a Mexican company to clean the Canadian food industry up,” he said. “Nobody in Canada wants to admit guilt.”

“The investigation is not over,” Charlebois said. “More questions are going to be asked and Canadians will want more answers.”

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

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