Canada Bread to pay $50mn in fine for fixing price of bread for years in unison with rival
Canada Bread to pay $50mn in fine for fixing price of bread for years
Canada Bread has agreed to pay $50 million in fine after pleading guilty to having played a role in fixing the price of bread for years. The company revealed in an Ontario Court on Wednesday that it frequently communicated with its competitor under previous managerial regime to raise the wholesale prices in unison, making bread costlier for Canadian consumers in the process.
Canada Bread, which owns dozens of brands of baked goods, has been owned by Mexican food giant Grupo Bimbo since 2014. Prior to that, the company was owned by Maple Leaf Foods.
Price fixing by Canada Bread
In a statement of facts agreed upon by the company, it was revealed that Canada Bread held discussions regarding prices of the bread products with its rival company Weston Foods (Canada) Inc,owned by George Weston Ltd at that time, on different occasions spanning from 2007 to 2011.
As per documents filed at the Superior Court of Justice in Toronto, the executives from the two companies first held discussions in June 2007. Both companies agreed to increase prices by six and seven cents per loaf of bread in October of that year. Then separate discussions were held in September 2007, and it was decided in unison to raise prices by 12 to 14 cents per loaf starting the next month.
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The two companies again engaged in price fixing in January or March of 2011, based on discussions held in November of the previous year. The price-fixing scandal first came to light in 2015, which prompted an investigation by Canada's Competition Bureau.
Grupo Bimbo issues clarification
Grupo Bimbo, which now owns Canada Bread, has clarified that it was not aware of the scandal at the time of purchase. "Grupo Bimbo was not told that Canada Bread had participated with Weston in the making of arrangements to increase the wholesale price of [bread], and the due diligence otherwise completed by Grupo Bimbo did not reveal that Canada Bread and Weston participated in such arrangements," the documents read.
Investigation still going on
While Canada Bread has pleaded guilty to the charges of price fixing, Canada's Competition Bureau has now opened an investigation into other companies suspected of having engaged in similar activities. "Fixing the price of bread — a food staple of Canadian households — was a serious criminal offence," Commissioner Matthew Boswell said.
"Our continuing investigation remains a top priority. We are doing everything in our power to pursue those who engage in price-fixing," he added.
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