Canadian Bread Wholesalers Accused of 16-Year-Long Price-Fixing Scheme

Penalties for price-fixing include fines of up to $25 million and imprisonment for a maximum term of 14 years

Canada’s largest bread wholesalers are accused by the country’s Competition Bureau of price-fixing and colluding with store retailers.

Two of Canada’s largest bread wholesalers are under fire for an alleged price-fixing scheme, said to have run for over a decade. Canada’s Competition Bureau claims that Canada Bread Company Ltd. and George Weston Ltd. agreed to boost bread prices together by seven cents per year for 16 years beginning in 2001.

The Competition Bureau is claiming that retailers Loblaw Companies Ltd., Walmart Canada Corp., Sobeys Inc., Metro Inc. and Giant Tiger Stores Ltd. agreed to the price hike — but only if their competitors would, too, to maintain a fixed price in the market.

Previously sealed court documents referred to the pattern as the “7/10 convention” meaning there was an average seven-cent price increase at wholesale and 10-cent price increase for consumers purchasing bread in a store, according to the Toronto Star.

In December of 2017 Loblaw and George Weston approached the Competition Bureau with information about the scheme and received immunity in exchange for their co-operation. “We have admitted our role, and you cannot price fix alone,” Loblaw spokesman Kevin Groh told The Canadian Press. Groh also called the documents “unequivocal.” As an act of contrition, Loblaws is offering customers a $25 gift card if they sign up on their website.

Metro and Sobeys have both issued statements denying their involvement. "Based on the information processed to date, we have found no evidence that Metro has violated the Competition Act," said the statement from Metro Inc. "We do not believe that the bureau's investigation will have a material adverse effect on the corporation's business, results of operations or financial condition.”

Sobey’s statement was similar: “At this time, Sobeys does not believe that it or any of its employees have violated the Competition Act. Any assertion of an industry-wide price-fixing arrangement has not been proven.”

Sobey’s was also considering legal action against George Weston for unfairly implicating them in the scheme, according to another report from The Canadian Press.

Although Walmart Canada declined to comment on the issue, Giant Tiger put out a statement saying, "We look forward to seeing the results of the Competition Bureau's complete investigation."

The documents released on January 31 had been filed earlier to support search warrants in the case, but the allegations have not been proven in court. According to the Toronto Star, penalties for price-fixing include fines of up to $25 million and imprisonment for a maximum term of 14 years.

The Daily Meal has reached out to the companies involved for comment.

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