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Canada Bread agrees to $50M fine for role in bread price-fixing scandal

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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.”

 

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STD epidemic slows as new syphilis and gonorrhea cases fall in US

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NEW YORK (AP) — The U.S. syphilis epidemic slowed dramatically last year, gonorrhea cases fell and chlamydia cases remained below prepandemic levels, according to federal data released Tuesday.

The numbers represented some good news about sexually transmitted diseases, which experienced some alarming increases in past years due to declining condom use, inadequate sex education, and reduced testing and treatment when the COVID-19 pandemic hit.

Last year, cases of the most infectious stages of syphilis fell 10% from the year before — the first substantial decline in more than two decades. Gonorrhea cases dropped 7%, marking a second straight year of decline and bringing the number below what it was in 2019.

“I’m encouraged, and it’s been a long time since I felt that way” about the nation’s epidemic of sexually transmitted infections, said the CDC’s Dr. Jonathan Mermin. “Something is working.”

More than 2.4 million cases of syphilis, gonorrhea and chlamydia were diagnosed and reported last year — 1.6 million cases of chlamydia, 600,000 of gonorrhea, and more than 209,000 of syphilis.

Syphilis is a particular concern. For centuries, it was a common but feared infection that could deform the body and end in death. New cases plummeted in the U.S. starting in the 1940s when infection-fighting antibiotics became widely available, and they trended down for a half century after that. By 2002, however, cases began rising again, with men who have sex with other men being disproportionately affected.

The new report found cases of syphilis in their early, most infectious stages dropped 13% among gay and bisexual men. It was the first such drop since the agency began reporting data for that group in the mid-2000s.

However, there was a 12% increase in the rate of cases of unknown- or later-stage syphilis — a reflection of people infected years ago.

Cases of syphilis in newborns, passed on from infected mothers, also rose. There were nearly 4,000 cases, including 279 stillbirths and infant deaths.

“This means pregnant women are not being tested often enough,” said Dr. Jeffrey Klausner, a professor of medicine at the University of Southern California.

What caused some of the STD trends to improve? Several experts say one contributor is the growing use of an antibiotic as a “morning-after pill.” Studies have shown that taking doxycycline within 72 hours of unprotected sex cuts the risk of developing syphilis, gonorrhea and chlamydia.

In June, the CDC started recommending doxycycline as a morning-after pill, specifically for gay and bisexual men and transgender women who recently had an STD diagnosis. But health departments and organizations in some cities had been giving the pills to people for a couple years.

Some experts believe that the 2022 mpox outbreak — which mainly hit gay and bisexual men — may have had a lingering effect on sexual behavior in 2023, or at least on people’s willingness to get tested when strange sores appeared.

Another factor may have been an increase in the number of health workers testing people for infections, doing contact tracing and connecting people to treatment. Congress gave $1.2 billion to expand the workforce over five years, including $600 million to states, cities and territories that get STD prevention funding from CDC.

Last year had the “most activity with that funding throughout the U.S.,” said David Harvey, executive director of the National Coalition of STD Directors.

However, Congress ended the funds early as a part of last year’s debt ceiling deal, cutting off $400 million. Some people already have lost their jobs, said a spokeswoman for Harvey’s organization.

Still, Harvey said he had reasons for optimism, including the growing use of doxycycline and a push for at-home STD test kits.

Also, there are reasons to think the next presidential administration could get behind STD prevention. In 2019, then-President Donald Trump announced a campaign to “eliminate” the U.S. HIV epidemic by 2030. (Federal health officials later clarified that the actual goal was a huge reduction in new infections — fewer than 3,000 a year.)

There were nearly 32,000 new HIV infections in 2022, the CDC estimates. But a boost in public health funding for HIV could also also help bring down other sexually transmitted infections, experts said.

“When the government puts in resources, puts in money, we see declines in STDs,” Klausner said.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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World’s largest active volcano Mauna Loa showed telltale warning signs before erupting in 2022

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WASHINGTON (AP) — Scientists can’t know precisely when a volcano is about to erupt, but they can sometimes pick up telltale signs.

That happened two years ago with the world’s largest active volcano. About two months before Mauna Loa spewed rivers of glowing orange molten lava, geologists detected small earthquakes nearby and other signs, and they warned residents on Hawaii‘s Big Island.

Now a study of the volcano’s lava confirms their timeline for when the molten rock below was on the move.

“Volcanoes are tricky because we don’t get to watch directly what’s happening inside – we have to look for other signs,” said Erik Klemetti Gonzalez, a volcano expert at Denison University, who was not involved in the study.

Upswelling ground and increased earthquake activity near the volcano resulted from magma rising from lower levels of Earth’s crust to fill chambers beneath the volcano, said Kendra Lynn, a research geologist at the Hawaiian Volcano Observatory and co-author of a new study in Nature Communications.

When pressure was high enough, the magma broke through brittle surface rock and became lava – and the eruption began in late November 2022. Later, researchers collected samples of volcanic rock for analysis.

The chemical makeup of certain crystals within the lava indicated that around 70 days before the eruption, large quantities of molten rock had moved from around 1.9 miles (3 kilometers) to 3 miles (5 kilometers) under the summit to a mile (2 kilometers) or less beneath, the study found. This matched the timeline the geologists had observed with other signs.

The last time Mauna Loa erupted was in 1984. Most of the U.S. volcanoes that scientists consider to be active are found in Hawaii, Alaska and the West Coast.

Worldwide, around 585 volcanoes are considered active.

Scientists can’t predict eruptions, but they can make a “forecast,” said Ben Andrews, who heads the global volcano program at the Smithsonian Institution and who was not involved in the study.

Andrews compared volcano forecasts to weather forecasts – informed “probabilities” that an event will occur. And better data about the past behavior of specific volcanos can help researchers finetune forecasts of future activity, experts say.

(asterisk)We can look for similar patterns in the future and expect that there’s a higher probability of conditions for an eruption happening,” said Klemetti Gonzalez.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.

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Waymo’s robotaxis now open to anyone who wants a driverless ride in Los Angeles

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Waymo on Tuesday opened its robotaxi service to anyone who wants a ride around Los Angeles, marking another milestone in the evolution of self-driving car technology since the company began as a secret project at Google 15 years ago.

The expansion comes eight months after Waymo began offering rides in Los Angeles to a limited group of passengers chosen from a waiting list that had ballooned to more than 300,000 people. Now, anyone with the Waymo One smartphone app will be able to request a ride around an 80-square-mile (129-square-kilometer) territory spanning the second largest U.S. city.

After Waymo received approval from California regulators to charge for rides 15 months ago, the company initially chose to launch its operations in San Francisco before offering a limited service in Los Angeles.

Before deciding to compete against conventional ride-hailing pioneers Uber and Lyft in California, Waymo unleashed its robotaxis in Phoenix in 2020 and has been steadily extending the reach of its service in that Arizona city ever since.

Driverless rides are proving to be more than just a novelty. Waymo says it now transports more than 50,000 weekly passengers in its robotaxis, a volume of business numbers that helped the company recently raise $5.6 billion from its corporate parent Alphabet and a list of other investors that included venture capital firm Andreesen Horowitz and financial management firm T. Rowe Price.

“Our service has matured quickly and our riders are embracing the many benefits of fully autonomous driving,” Waymo co-CEO Tekedra Mawakana said in a blog post.

Despite its inroads, Waymo is still believed to be losing money. Although Alphabet doesn’t disclose Waymo’s financial results, the robotaxi is a major part of an “Other Bets” division that had suffered an operating loss of $3.3 billion through the first nine months of this year, down from a setback of $4.2 billion at the same time last year.

But Waymo has come a long way since Google began working on self-driving cars in 2009 as part of project “Chauffeur.” Since its 2016 spinoff from Google, Waymo has established itself as the clear leader in a robotaxi industry that’s getting more congested.

Electric auto pioneer Tesla is aiming to launch a rival “Cybercab” service by 2026, although its CEO Elon Musk said he hopes the company can get the required regulatory clearances to operate in Texas and California by next year.

Tesla’s projected timeline for competing against Waymo has been met with skepticism because Musk has made unfulfilled promises about the company’s self-driving car technology for nearly a decade.

Meanwhile, Waymo’s robotaxis have driven more than 20 million fully autonomous miles and provided more than 2 million rides to passengers without encountering a serious accident that resulted in its operations being sidelined.

That safety record is a stark contrast to one of its early rivals, Cruise, a robotaxi service owned by General Motors. Cruise’s California license was suspended last year after one of its driverless cars in San Francisco dragged a jaywalking pedestrian who had been struck by a different car driven by a human.

Cruise is now trying to rebound by joining forces with Uber to make some of its services available next year in U.S. cities that still haven’t been announced. But Waymo also has forged a similar alliance with Uber to dispatch its robotaxi in Atlanta and Austin, Texas next year.

Another robotaxi service, Amazon’s Zoox, is hoping to begin offering driverless rides to the general public in Las Vegas at some point next year before also launching in San Francisco.

The Canadian Press. All rights reserved.

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