Grocery Chain To Pay $500 Million For Bread Price-Fixing Scheme In ‘Largest Antitrust Settlement In History’

Canadians have noticed the increased prices of packaged bread, and their worries were confirmed by a major class-action lawsuit. The case was brought against Canadian food retail heavyweights including supermarket chain Loblaw, Metro, Walmart Canada, Sobeys, and Giant Tiger. So far, Loblaw and its parent company George Weston Ltd. agreed to pay a $500 million settlement for their involvement in a price-fixing scheme.

Loblaw’s Settlement for Price-Fixing

The plaintiffs alleged that the companies engaged in an industry-wide price-fixing conspiracy between 2001 and 2015 in order to create an artificial spike in prices of packaged bread. As a result, George Weston is set to pay $247.5 in cash. At the same time, Loblaw will pay $252.5 million, with $156.5 million in cash, and $96 million in credit previously paid to customers through the Loblaw Card program. 

“For our part in this industry-wide arrangement that we discovered and self-reported in 2015, we sincerely apologize,” Loblaw spokesperson Catherine Thomas wrote in a statement. “We know we have more to do to regain the trust of our customers and we’re committed to doing that.” 

Galen Weston, chair and chief executive of George Weston as well as chair executive of Loblaw, commented on the situation. “This behavior 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 behavior that did not meet our values and ethical standards.“

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“Half of the country is going to apply”

The payout, if approved by the court, will be the largest antitrust settlement to have ever happened in Canada. “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 of Strosberg Wingfield Sasso LLP.

The lawyers representing the plaintiff are now preparing for trial in the class actions against Sobeys, Metro, Giant Tiger, and Walmart Canada. “This will also be the largest distribution in a class action in Canadian history,” Strosberg said. “I would assume that half the country is going to apply.” 

The Canada Bread Price-Fixing Scheme

The Competition Bureau began its investigation of the alleged price-fixing scheme at the beginning of 2016. At the time, Loblaw and Weston Foods admitted to participating in the agreement and received immunity for their cooperation. During the conspiracy that lasted over the course of 16 years, bread prices increased by at least $1.50, the bureau alleged.

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Denying the Allegations

In June 2023, Canada Bread received fines of $50 million after pleading guilty to four accounts of price-fixing. In fact, the bureau called it the largest fine regarding price-fixing in a Canadian court. By October 2023, Canada Bread denied the allegation of participating in a price-fixing conspiracy as well as profiting from the alleged conspiracy.

Additionally, Metro submitted a statement to the Ontario Superior Court, where the company denies any involvement, and accuses Loblaw and George Weston of trying to implicate their business rivals for their own misdeeds. Sobeys has filed a similar statement of defense, saying the company was implicated on false pretenses. Walmart Canada also denied involvement, as did Giant Tiger, who claimed to not know about the alleged conspiracy.

Boycotting Canada Bread

Thousands of Canadians supported a boycott against Loblaw in May. The organizer, Emily Johnson, comments that a history of price-fixing and other malpractice could mean the company will continue to avoid upholding the Grocery Code of Conduct, which is a set of rules for retailers charging suppliers. Proper adherence may lead to lower grocery prices for consumers.

Johnson calls the settlement a step “in the right direction” but has no plans of ending the boycott. In fact, “it’s continuing to renew the resolve to boycott overall,” she said. “I still can’t afford my groceries.”

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