Canada Bread Agrees to Pay $50 Million for Role in Bread Price Fixing

Canada Bread Co. will pay a fine of $50 million after pleading guilty to its role in a criminal price-fixing arrangement that raised the wholesale price of fresh commercial bread. A worker restocks shelves in the bakery and bread aisle at an Atlantic Superstore grocery in Halifax, Jan. 28, 2022. (The Canadian Press/Kelly Clark)

Canada Bread has agreed to pay $50 million after admitting to colluding with competitors in Canada’s bakery industry to fix bread prices.

“Fixing the price of bread—a food staple of Canadian households—was a serious criminal offence,” said Commissioner of Competition Matthew Boswell in a June 21 release. “Our continuing investigation remains a top priority. We are doing everything in our power to pursue those who engage in price-fixing.”

Canada Bread revealed in an Ontario court on June 21 that an executive at the company discussed the prices of bread products with senior executives at Weston Foods, at that time a subsidiary of George Weston Ltd., the parent company of grocery chain Loblaws.

The company has pleaded guilty to four counts under Section 45 of Canada’s Competition Act, each of which comes with a maximum penalty of $10 million for the first two and $25 million for the next two. The Competition Bureau recommended to the Public Prosecution Service of Canada that Canada Bread receive leniency in sentencing in return for its cooperation with the investigation, bringing the total amount due to $50 million.

In June 2007, Canada Bread and Weston Foods executives agreed to engage in two price increases, one in 2007 and one in 2011, according to the Competition Bureau. At the time of the price-fixing scandal, Canada Bread was under the ownership of Maple Leaf Foods. The senior leadership of Canada Bread that engaged in the price-fixing is no longer with the company.

The Competition Bureau launched an investigation into the price-fixing scandal in 2017 after receiving information from an anonymous source about the scandal.

The watchdog then executed search warrants against companies such as Loblaws, Metro Inc., Walmart Canada, Sobeys Inc., Giant Tiger Stores Ltd., and Canada Bread. Weston and Loblaws were granted immunity from prosecution for cooperating in the matter, including alerting the bureau about the scandal in 2015.

In a statement, Canada Bread noted that the price-fixing scandal took place when the company was owned and controlled by Maple Leaf Foods, and was not occurring when it was acquired by Grupo Bimbo in 2014.

“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,” they said.

Grupo Bimbo said they are considering “all legal options against those responsible” for the price-fixing scandal. “Canada Bread is committed to delivering high-quality products and maintaining the trust of our customers. We take great pride that our products are made by Canadians, for Canadians.”

The Canadian Press contributed to this report.