Loblaw, George Weston to settle class action over bread price-fixing for $500M
Posted July 25, 2024 3:55 am.
Last Updated July 25, 2024 5:04 am.
Loblaw Cos. Ltd. and its parent company, George Weston Ltd., have agreed to pay $500 million to settle a class-action lawsuit regarding their involvement in an alleged bread price-fixing scheme.
The class-action case was brought against a group of companies, including Loblaw and the Weston companies, Metro, Walmart Canada, Giant Tiger, and Sobeys, and its owner, Empire Co. Ltd.
The plaintiffs allege those companies participated in a 14-year industry-wide price-fixing conspiracy between 2001 and 2015, which artificially increased packaged bread prices.
George Weston will pay $247.5 million in cash, while Loblaw will pay $252.5 million, which includes $156.5 million in cash and credit for $96 million previously paid to customers by Loblaw under the Loblaw Card program.
Loblaw chairman Galen Weston, chairman and chief executive of George Weston, apologized on behalf of the companies.
“On behalf of the Weston group of companies, we are sorry for the price-fixing behaviour we discovered and self-reported in 2015,” the statement read.
“This behaviour should never have happened. We have the privilege of serving Canadians from coast to coast. That privilege needs to be earned each and every day. Reaching a settlement on this matter was the right thing to do in response to previous behaviour that did not meet our values and ethical standards.”
The Competition Bureau began investigating alleged bread price-fixing in January 2016. At the time, Weston Foods and Loblaw, both subsidiaries of George Weston, had previously admitted their participation in an “industry-wide price-fixing arrangement” and received immunity from prosecution in exchange for cooperating.
The bureau alleged in court documents in 2018 that at least $1.50 was added to the price of a loaf of bread during the 16-year conspiracy.
$500M settlement largest anti-trust settlement in Canadian history
In a statement, George Weston Ltd. said the companies “apologize to Canadians for their role in a decade-old, industry-wide bread price-fixing arrangement.”
Per Bank, President and Chief Executive Officer of Loblaw, said Canadians count on Loblaw to provide great value.
“We will continue to work hard to deliver on that commitment.”
Lawyers representing the plaintiffs say the payout, subject to court approval, is the largest anti-trust settlement in Canadian history.
“This is a significant milestone in Canadian class action history and sends a strong message that conduct that harms consumers will not be tolerated,” said Jay Strosberg, Managing Partner, Strosberg Wingfield Sasso LLP.
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In an interview with Breakfast Television, Strosberg said anybody who purchased bread in the last decade will likely receive a cheque, the amount of which depends on how many people come forward.
“It’s probably going to be the largest distribution in a class action in Canadian history as well,” said Strosberg. “It’s going to be a complicated distribution, but we have to give the money back to the people… those details are being worked out, but the short answer is, we’re going to be mailing out a lot of cheques.”
In June 2023, Canada Bread was fined $50 million after pleading guilty to four counts of price-fixing bread products under the Competition Act. The Competition Bureau called it the highest price-fixing fine ever imposed by a Canadian court.
Major grocers deny allegations
In its statement of defence in the class action file last October, Canada Bread denied participating in a wide-ranging conspiracy to fix the price of bread and denied profiting from the alleged conspiracy or from the price increases it admitted to.
Metro submitted a statement of defence and cross-claim to the Ontario Superior Court late last year accusing Loblaw and George Weston of conspiring to implicate the rival grocer.
Metro denied being involved in bread price-fixing and accused the companies of trying to spread the blame across the industry and avoid public perception that Loblaw was the sole retailer involved in price-fixing.
Sobeys also filed a statement of defence and crossclaim in the class action and has said it was falsely implicated.
Walmart Canada has also denied conspiring to fix the price of bread or violating the Competition Act, while Giant Tiger said it did not participate or know about the alleged conspiracy.
