Canada Bread has been fined $50 million by the Ontario Superior Court, marking the largest price-fixing penalty in Canadian legal history. The company confessed to its involvement in a criminal price-fixing arrangement that increased the wholesale price of commercial bread.
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Canada Bread Company Limited (CBCL) pled guilty to four counts of price-fixing under the Competition Act.
The news release reads, “In an Agreed Statement of Facts filed with the Court, CBCL admitted that they entered into arrangements with Weston Foods (Canada) Inc. and others to increase wholesale Fresh Commercial Bread prices on four occasions, resulting in two price increases in October 2007 and March 2011.”
At the time of the price-fixing, Maple Leaf Foods owned Canada Bread, and a majority of Canada Bread’s Board of Directors were senior officers of Maple Leaf Foods.
Canada Bread was acquired by Grupo Bimbo in 2014. Mexico-based Grupo Bimbo operates 215 bakeries, other plants, and approximately 1,600 sales centers in 34 countries throughout the Americas, Europe, Asia, and Africa.
In 2017, Weston Foods and Loblaw Companies Limited acknowledged their involvement in a similar “industry-wide price-fixing arrangement.”
Canada Bread states on the website, “It was only in 2017 that Grupo Bimbo learned about the matter. Since then, under Grupo Bimbo’s ownership, Canada Bread has provided full and consistent cooperation with the Competition Bureau.”
Per the news release by Competition Bureau, they advised leniency in sentencing due to Canada Bread’s full cooperation with the investigation, as part of the Bureau’s Leniency Program.
The penalty combines fines of $10 million each for counts 1 and 2, and $25 million each for counts 3 and 4, amounting to $70 million. A leniency rebate of about 30% was agreed upon, reducing the fine to $50 million.
This resolution comes as a result of the Bureau’s investigation into suspected price-fixing to boost wholesale bread prices and possible price-fixing among grocery stores to elevate retail prices.
Per the news release, the Bureau is still scrutinizing alleged price-fixing by Metro Inc., Sobeys Inc., Wal-Mart Canada Corporation, Giant Tiger Stores Limited, and Maple Leaf Foods Inc.
Matthew Boswell, Commissioner of Competition, said, “Fixing the price of bread ꟷ a food staple of Canadian households ꟷ was a serious criminal offence. Our continuing investigation remains a top priority. We are doing everything in our power to pursue those who engage in price-fixing.”
Grupo Bimbo says they are “considering all legal options against those responsible for the conduct at issue.”
Canada Bread is a leading producer and distributor of packaged fresh bread and bakery products in the country, employing approximately 4,400 Canadians.