Loblaw, Parent Company to Pay $500M in Settlement Over Bread Price-Fixing Scheme

The head office of Loblaw Companies Ltd. in Brampton, Ont., in a file photo. (CP Photo/Nathan Denette)

Loblaw Companies Limited and parent company George Weston Limited have agreed to pay out $500 million to settle a class-action lawsuit against them for their role in a bread price-fixing scheme.

“On behalf of the Weston group of companies, we are sorry for the price-fixing behaviour we discovered and self-reported in 2015. This behaviour should never have happened,” Loblaw Chairmen Galen Weston said in a July 25 press release.

“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 behaviour that did not meet our values and ethical standards.”

George Weston will pay out $247.5 million in cash as part of the settlement, while Loblaw will pay $156.5 million in cash and credit for $96 million previously paid to customers by Loblaw under the Loblaw Card program.

The statement said the companies have since enhanced their compliance programs by establishing a new independent compliance office and mandated employees to undergo compliance re-training and certification. A previous statement  from the companies said “the employees responsible for Weston Bakeries’ and Loblaw’s role” in the price-fixing arrangement were no longer employed.

The settlement is part of a nationwide class action lawsuit against the two companies and others including Sobeys Inc., Metro Inc., Walmart Canada, Giant Tiger Stores Limited and Canada Bread Company, Ltd. The companies are accused of allegedly fixing the price of certain packaged bread products, according to Strosberg Wingfield Sasso LLP, the law firm representing the plaintiffs.

The settlement is awaiting court approval and a formal settlement agreement between the two parties.

Back in 2017, the Competition Bureau launched an investigation after receiving information from an anonymous source that several companies had engaged in price-fixing that ran contrary to the Competition Act. The Bureau found through its investigation that Canada Bread and Weston Foods executives agreed in June 2007 to engage in two price increases in 2007 and in 2011.

In October 2017, Loblaw Companies Ltd. and George Weston Ltd. released a joint statement confirming they were fully cooperating with the industry-wide investigation. Weston and Loblaws were granted immunity from prosecution for their cooperation during the investigation.

In June 2023, Canada Bread was fined $50 million after pleading guilty to four counts of price-fixing bread products under the Competition Act, which the Competition Bureau said was the highest price-fixing fine ever imposed by a Canadian court.

At the time of the price-fixing, Weston Foods was a subsidiary of George Weston Ltd., the parent company of grocery chain Loblaws, and Canada Bread was owned and controlled by Maple Leaf Foods.

Several Companies Still Facing Lawsuits

The firms representing the plaintiffs said in a news release that the $500 million settlement was the largest anti-trust settlement in Canadian history.

“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 at Strosberg Wingfield Sasso LLP.

The monetary settlement represents a “very fair outcome for Canadians,” said Michael Vathilakis, another lawyer representing the plaintiffs with law firm Renno & Vathilakis Inc.

The firms will now prepare for ongoing class-action lawsuits against Canada Bread, Sobeys, Metro, Walmart Canada, and Giant Tiger, whom the plaintiffs have alleged were also involved in the price-fixing conspiracy.

In a statement to The Epoch Times, Metro said it was not a party to any “industry-wide” conspiracy to fix the price of bread, ”nor did it engage in conduct contrary to the Competition Act.”

Sobeys spokesperson Andrew Walker told The Epoch Times that the allegations are “unsubstantiated” and it has seen no evidence that it contravened the Competition Act.

“We will continue to defend our position vigorously and, to that end, last year we launched a lawsuit against Loblaw Company Limited related to this matter,” he said.

The Epoch Times reached out to Walmart and Giant Tiger for comment but didn’t immediately hear back.