Canada Bread has agreed to pay at least $50 million for its role in fixing the price of bread for years.
The company made the revelation in an Ontario court on Wednesday, acknowledging that under a previous management regime, it colluded with its competitors in Canada’s bakery industry to work in unison to raise the wholesale prices they charge to grocery chains, pushing up prices for consumers in the process.
The company — which makes dozens of brands of baked goods, including Dempster’s, Stonemill, Vachon and others — has been owned by Mexican food giant Grupo Bimbo since 2014, but prior to that, it was majority controlled by Maple Leaf Foods.
According to an agreed upon statement of facts, an executive at Canada Bread, who was also an officer at Maple Leaf Foods at the time, “had discussions about prices” for bread products with one of more senior executives at Weston Foods (Canada) Inc., a subsidiary at the time of George Weston Ltd., which also controls the Loblaws grocery chain.
The documents filed at the Superior Court of Justice in Toronto lay out what happened. They show that the executives discussed raising prices in June 2007, and subsequently agreed to do so by between six and seven cents per loaf in October of that year. After more discussions in September, they agreed to raise prices by twice that — 12 to 14 cents — starting the next month.
The pattern was repeated a few years later, with discussions in November 2010, leading to an agreement to raise prices by seven cents per loaf starting in January or March of 2011. A subsequent meeting in January led to an agreement to increase the price hike to 14 cents per loaf instead, starting in February.
The bread price-fixing scandal first came to light in 2015, when Canada’s Competition Bureau launched an investigation after receiving information from Loblaw and Weston about the existence of the scheme they were involved in. The two companies were granted immunity from prosecution by the bureau for co-operating in the matter.
The bureau subsequently executed search warrants against numerous companies, including Weston, Loblaw, Metro Inc., Sobeys Inc., Walmart Canada, Giant Tiger Stores Ltd., Overwaitea Food Group and Canada Bread.
Shake-up in the bakery
Kayla Hounsell looks at how Canadians were overcharged on bread products for years
Grupo Bimbo bought Canada Bread in 2014, and said it “only learned about the price-fixing arrangements after the Competition Bureau executed a search warrant against Canada Bread on Oct. 31, 2017.”
At the time of the sale, “Grupo Bimbo was not told that Canada Bread had participated with Weston in the making of arrangements to increase the wholesale price of [bread], and the due diligence otherwise completed by Grupo Bimbo did not reveal that Canada Bread and Weston participated in such arrangements,” the documents read.
The company has pleaded guilty to four counts under Section 45 of Canada’s Competition Act, each of which come with a maximum penalty of $10 million or $25 million. But the Director of Public Prosecutions, which handles cases when the Bureau finds evidence of a potential criminal offence, has agreed to recommend a 30 per cent “leniency reduction” for the company’s co-operation. That will bring the total bill down to $50 million.
Investigation ongoing
In the court documents, Canada Bread says its “liability resolved with the entering into of this plea” but notes that the Competition Bureau’s investigation into other companies is ongoing.
In a news statement, the bureau noted that the $50-million fine is the highest price-fixing fine imposed by a Canadian court to date, and it’s also the first time any sort of monetary penalty has emerged from the bureau’s eight-year investigation.
“Fixing the price of bread — a food staple of Canadian households — was a serious criminal offence,” commissioner Matthew Boswell said. “Our continuing investigation remains a top priority. We are doing everything in our power to pursue those who engage in price-fixing.”
In an interview with CBC News, Boswell defended the amount of time the Bureau has spent investigating the issue.
“We seized more electronic records and electronic information than on any other case in the Bureau’s history,” he said. “I’m incredibly proud of our team of investigators and the prosecutors involved in in today’s guilty plea for getting us to this milestone, but come tomorrow, we’ll put our nose down again and continue working on the the rest of the investigation.”
Boswell noted that the fines that Grupo Bimbo agreed to are the maximum allowable under current legislation, but those laws are set to change in a way that could make any future penalties even greater.
“As of this Friday, actually, there will no longer be a maximum fine per offence, which will make the legal and financial risks to companies much more significant going forward,” he said.
So far no other charges have been laid by the Competition Bureau in its almost eight-year probe, but two class-action lawsuits, one in Ontario and one in Quebec, have been certified in court, each seeking financial compensation from various companies involved.
Although it was granted immunity in the case by the Bureau, Loblaw also offered its customers $25 gift cards when the story first came to light.
It’s also the first time any companies besides Loblaw and Weston has admitted to being involved in the scheme since the story first broke years ago. In testimony in front of a parliamentary committee earlier this year, Empire Foods CEO Michael Medline, which owns Sobey’s, vehemently pushed back at any allegations that the Nova Scotia-based grocery chain was in any way involved.
Grocery chain leaders push back at price-gouging allegations
At a committee hearing in Ottawa this week, the heads of Loblaw, Metro and Empire Foods faced tough questions from parliamentarians about why food prices continue to skyrocket. All three pushed back forcefully against allegations they are profiteering from high inflation.
In a statement to CBC News, Grupo Bimbo said it “is considering all legal options against those responsible for the conduct addressed in court today.”
“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,” Canada Bread’s vice-president Alice Lee said in a statement, adding that the company employs 4,400 people in Canada.
For its part, Maple Leaf Foods said it had no prior knowledge of the fine that Grupo Bimbo agreed to, prior to being contacted by CBC News on Wednesday.
“It is completely unknown to us why Canada Bread or its owner would have entered into this plea agreement,” the company said. “We are not aware of any wrongdoing by Canada Bread or its senior leadership during the time that we were a shareholder.”
“We are not aware of and have never engaged in inappropriate or anticompetitive activity, and we will defend ourselves vigorously against any allegation to the contrary.”
Shoppers react to $50M fine for fixing bread price
On the streets of Toronto, grocery shoppers shared their thoughts with CBC News about the record-setting $50 million fine for one of the companies involved in a years-long scheme to artificially push up the price of bread.
Retail consultant Bruce Winder said in an interview with CBC News on Wednesday that given the change of ownership, it’s not surprising to see Grupo Bimbo blaming the previous regime and trying to recoup some costs and reputational damage by pursuing legal action.
“One can argue that Maple Leaf sold them an asset without disclosing a material risk to that asset,” he said. “It’s sort of like buying a car and … everything looks great on this car [but] you take it home and a few weeks later the engine falls apart.”
MONTREAL – One expert says entry-level pay under the tentative deal between Air Canada and its pilots could be a stumbling block ahead of a union vote on the agreement.
Under their current contract, pilots earn far less in their first four years at the company before enjoying a big wage increase starting in year five.
The Air Line Pilots Association had been pushing to scrap the so-called “fixed rate” provision entirely.
But according to a copy of the contract summary obtained by The Canadian Press, the proposed deal announced Sunday would merely cut the four-year period of lower pay to two years.
John Gradek, who teaches aviation management at McGill University, says as many as 2,000 of Air Canada’s roughly 5,200 active pilots may earn entry-level wages following a recent hiring surge.
After the airline averted a strike this week, Gradek says the failure to ditch the pay grade restrictions could prompt pushback from rank-and-file flight crew and jeopardize the deal, which is up for a vote next month.
This report by The Canadian Press was first published Sept. 18, 2024.
ROME (AP) — Salvatore “Totò” Schillaci, the Italy striker who was top scorer at its home World Cup in 1990, has died. He was 59.
Schillaci had been hospitalized in Palermo following treatment for colon cancer.
The Palermo Civico hospital said in a statement that Schillacci died on Wednesday morning after being admitted 11 days ago.
Schillaci scored six goals for Italy during the 1990 World Cup. He came on as a substitute during Italy’s opener against Austria, scored in a 1-0 victory, and went on to earn the Golden Boot awarded to the tournament’s top scorer. He only scored one other goal for Italy in his career.
Italian soccer federation president Gabriele Gravina announced that a minute of silence would be held in memory of Schillaci before all games in the country for the rest of the week.
“The uncontrollable celebrations, in which his face was the symbol of shared joy, will remain forever part of Italian soccer (history),” Gravina said. “Totò was a great player, a symbol of tenacious desire and redemption. … His soccer was full of passion. And that fearless spirit made everyone appreciate him and will make him immortal.”
Schillaci also won the Golden Ball award at the 1990 World Cup as the tournament’s top player ahead of Lothar Matthaus and Diego Maradona.
Schillaci played for Messina, Juventus, Inter Milan and Japanese team Jubilo Iwata during his club career.
“You made an entire nation dream during the Magical Nights of Italia ’90,” Inter said on its social media channels.
West Germany won the 1990 World Cup, beating Argentina in the final, while Italy beat England for third place with a winning penalty kick from Schillaci.
Roberto Baggio, who scored Italy’s opening goal in the third-place match, wrote on Instagram, “Ciao my dear friend.”
Having been born and raised in Palermo, the Palermo soccer team announced that it would hold a public viewing of Schillaci at its Renzo Barbera stadium ahead of the funeral, the Gazzetta dello Sport reported.
French soccer player Wissam Ben Yedder will stay free ahead of his trial on charges of sexual assault while intoxicated, one of his lawyers told The Associated Press on Wednesday.
Marie Roumiantseva said Ben Yedder will remain under strict judicial supervision after a woman filed a lawsuit for sexual assault earlier this month.
The 34-year-old Ben Yedder, a prolific striker in the French league, was briefly detained then released after the alleged incident in his car on the French Riviera. Ben Yedder had been stopped by police after he first refused to do so. He was then put in a jail cell.
After he was summoned to appear in court on Oct. 15 and placed under judicial supervision, the Nice prosecutor’s office appealed the decision not to remand the player in custody. The investigative chamber of the Court of Appeal of Aix-en-Provence did not grant this request and kept Ben Yedder under judicial supervision.
Ben Yedder attended a hearing Tuesday during which he offered to go to rehab. He has admitted he drove while under the influence of alcohol but has denied any sexual assault.
In a separate legal case last year, Ben Yedder was charged with “rape, attempted rape and sexual assault” over another alleged incident in the south of France.
Ben Yedder has been without a club since his contract with Monaco expired at the end of last season.
