Ontario Superior Court fined the Canada Bread Company $50 million on Wednesday after it pleaded guilty to price-fixing.
It is the highest price-fixing fine in Canada ever, according to the Competition Bureau of Canada.
Canada Bread pleaded guilty to four counts of price-fixing under the Competition Act, admitting that it arranged with Weston Foods, a competitor, to increase the prices of various bagged and sliced bread products. Those included sandwich bread, hot dog buns and rolls.
The price-fixing resulted in two price increases — one in 2007 and one in 2011.
The Competition Bureau previously alleged that Canada Bread and Weston Bakeries, which is owned by George Weston Ltd., the parent company of grocery chain Loblaw, had agreed to increase bread prices over a 14-year period. The two companies are the largest bread makers in Canada.
The Bureau alleged that the companies had directly communicated to boost bread prices before meeting with retailers to get them to accept the fixed prices.
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At the time of the price-fixing, Canada Bread was under the ownership of Maple Leaf Foods. The senior leadership of Canada Bread responsible for the price-fixing is no longer with the company, according to the Bureau.
Canada Bread is currently a subsidiary of Mexico-based Grupo Bimbo, which says it’s now considering “all legal options against those responsible.”
The $50-million fine represents the maximum applicable under the law, minus a discount applied for Canada Bread cooperating with the investigation and making its guilty plea.
The Bureau continues to investigate alleged price-fixing by other companies, including Metro Inc., Sobeys Inc., Wal-Mart Canada Corporation, Giant Tiger Stores Limited and Maple Leaf Foods Inc.
The news comes amid heightened scrutiny over Canadian grocers’ pricing methods as grocery bills have skyrocketed in recent years. Grocer CEOs, including Loblaw’s Galen G. Weston, have testified to the federal government that they are not profiteering amid inflation.
— with files from Global News’ Andrew Russell and The Canadian Press.
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