Canada Bread agrees to $50M fine for role in bread price-fixing scandal
June 21, 2023
By Bakers Journal
Toronto – Canada Bread will pay a $50 million fine concerning two wholesale price increases implemented by Weston and Canada Bread more than a decade ago, when Canada Bread was majority owned and controlled by Maple Leaf Foods.
In a proceeding in the Ontario Superior Court in Toronto June 21, Canada Bread agreed to pay the fine concerning two wholesale price increases implemented by Weston Foods and Canada Bread in order to resolve allegations made against it as part of an investigation by the Competition Bureau of Canada into packaged bread that began in 2016.
As part of the investigation, in 2017 Weston and Loblaws were granted immunity from prosecution in exchange for cooperation with the Competition Bureau.
According to court documents filed June 21:
- In 2007 and 2010-11, one or more senior executives at Weston made four pricing arrangements directly with the then-Chief Executive Officer of Canada Bread, who at the same time was also a senior officer of Maple Leaf Foods.
- These pricing arrangements resulted in the implementation of one price increase in 2007 and a second in 2011.
- During the period in question, Canada Bread was controlled by Maple Leaf Foods. A majority of Canada Bread’s Board of Directors were senior officers of Maple Leaf Foods. At the operating level, most of the senior officers of Canada Bread also held positions as senior officers of Maple Leaf Foods. Maple Leaf Food’s ownership of Canada Bread continued until 2014.
- Canada Bread was acquired by Grupo Bimbo in 2014. Grupo Bimbo was not told of, nor did it uncover, this prior conduct during the sale process.
Grupo Bimbo only learned about the conduct in 2017. Under Grupo Bimbo’s ownership, Canada Bread provided material and consistent cooperation to the Competition Bureau.
Under new ownership and leadership since 2014, Canada Bread has cooperated with the Competition Bureau’s investigation, established controls and initiatives to create a first-tier compliance program and taken the initiative to resolve the investigation today, Canada Bread said in a news release.
“Under new ownership, Canada Bread is committed to being a responsible partner to our valued customers and making bread an accessible and reliable food source for Canadians. We are pleased to have resolved this matter, and we look forward to building upon our investments in Canada” said Alice Lee, vice-president of Canada Bread.
Grupo Bimbo is considering all legal options against those responsible for the conduct addressed in court today, the company said in a statement.
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