Canada Bread fined $50M for fixing bread prices

Canada Bread Company was fined $50 million by the Ontario Superior Court after pleading guilty for its role in a criminal price-fixing arrangement that raised the wholesale price of fresh commercial bread. The fine is the highest price-fixing fine imposed by a Canadian court to date.

The bread producer and distributor pleaded guilty to four counts of price-fixing under the Competition Act. Canada Bread admitted that it arranged with its competitor, Weston Foods (Canada) to increase prices for various bagged and sliced bread products, such as sandwich bread, hot dog buns and rolls. The price-fixing resulted in two price increases, one in 2007 and one in 2011.

At the time of the price-fixing, Canada Bread was owned by Maple Leaf Foods. The senior leadership of Canada Bread responsible for the price-fixing is no longer with the company. The company is now owned by Grupo Bimbo.

The Competition Bureau recommended to the Public Prosecution Service of Canada that Canada Bread receive leniency in sentencing in return for its full cooperation with the Bureau’s investigation, in accordance with the Bureau’s Leniency Program. The fine represents the maximum applicable under the law, less a leniency discount for Canada Bread’s co-operation and guilty plea.

The guilty plea is the result of an ongoing investigation by the Bureau into alleged price-fixing between producers to raise wholesale bread prices, as well as alleged price-fixing between grocery stores to raise retail prices.

The record fine for Canada Bread is a significant milestone in the bureau’s ongoing investigation. The Bureau continues to investigate alleged price-fixing by other companies, including Metro, Sobeys, Wal-Mart Canada, Giant Tiger Stores, and Maple Leaf Foods.

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

In December 2017, Weston Foods and Loblaw Companies, both subsidiaries of George Weston Limited (GWL), announced their participation in what they described as an “industry-wide price-fixing arrangement” involving the co-ordination of retail and wholesale bread prices.

In exchange for their full cooperation with the Competition Bureau’s investigation, Weston, Loblaw and GWL received immunity from prosecution.