The Ontario Superior Court on Wednesday fined Canada Bread Company Ltd. a record $50 million after the company pleaded guilty for its part in a criminal price-fixing deal that increased the wholesale price of fresh commercial bread.
It’s the highest price-fixing fine by a Canadian court, according to a news release from Competition Bureau Canada.
Canada Bread pleaded guilty to four counts of price-fixing under Canada’s Competition Act, admitting that it worked with Weston Foods (Canada) Inc., a competitor, to boost prices in of bagged and sliced bread products, including sandwich bread, hot dog buns and rolls, in 2007 and 2011.
“Fixing the price of bread ꟷ a food staple of Canadian households ꟷ 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,” Commissioner of Competition Matthew Boswell said in a statement.
Some leniency for Canada Bread
Canada Bread avoided a heavier fine by pleading guilty because the Competition Bureau recommended to the Public Prosecution Service of Canada that the company receive leniency in sentencing in exchange for its full cooperation with the bureau’s investigation into the plot. “The fine represents the maximum applicable under the law, less a leniency discount for Canada Bread’s cooperation and guilty plea,” the release stated.
Canada Bread was under the ownership of Maple Leaf Foods at the time of the price-fixing. Canada Bread was acquired by Grupo Bimbo in 2014. The senior leadership of Canada Bread responsible for the price-fixing is no longer with the company, according to the release.
According to Canada Bread’s news release, Grupo Bimbo learned about the allegations in 2017 and since that time, Canada Bread “has provided full and consistent cooperation with the Competition Bureau.”
“Grupo Bimbo is considering all legal options against those responsible for the conduct at issue. We are committed to ensuring that the necessary actions are taken to address this matter appropriately,” Canada Bread’s release stated.
Bread price-fixing probe continues
Competition Bureau Canada‘s investigation is continuing into alleged price-fixing between producers to raise wholesale bread prices and alleged price-fixing between grocery stores to raise retail prices. Other companies included in the investigation include Wal-Mart Canada Corp., Sobeys Inc., Metro Inc., Maple Leaf Foods Inc. and Giant Tiger Stores Ltd.
When the Bureau finds evidence of a criminal offence, it refers the matter to the Public Prosecution Service of Canada (PPSC). The PPSC then decides whether charges should be laid and has authority over any resulting prosecutions.
Weston Foods and Loblaw Companies Ltd., subsidiaries of George Weston Limited (TSX:WN), in December 2017 announced their participation in what they described as an “industry-wide price-fixing arrangement” involving the coordination of retail and wholesale bread prices. In exchange for their full cooperation with the Competition Bureau investigation, Weston, Loblaw and GWL received immunity from prosecution.
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