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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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With grief lingering, Blue Jackets GM Waddell places focus on hockey in wake of Gaudreau’s death

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BUFFALO, N.Y. (AP) — Hearing the familiar sounds of clacking sticks and pucks banging off the boards and glass while watching Columbus Blue Jackets prospects from the stands of a cold rink on a warm late-summer afternoon was not enough to wash away the lingering residuals of grief for Don Waddell on Saturday.

That, the Blue Jackets’ general manager acknowledged, will take more time than anyone can guess — weeks, months, perhaps an entire season and beyond.

What mattered is how spending the weekend attending the Sabres Prospects Challenge represented a start to what Waddell called among the first steps in refocusing on hockey and the future in the aftermath of the deaths of Columbus star Johnny Gaudreau and his brother, Matthew, who were struck by a suspected drunken driver while riding bicycles on Aug 29.

“We got to play hockey,” Waddell said. “We’re not going to forget about Johnny and his family, the Gaudreau family.”

He then reflected on the speech Johnny Gaudreau’s wife, Meredith, made during the brothers’ funeral on Monday, by urging those in mourning to move forward as she will while focusing on raising their children.

“Everybody knows that Johnny wants them to play hockey,” Waddell said. “And everybody’s rallying around that.”

The resumption of hockey in Columbus began last week, when most Blue Jackets players returned to their facility to be together and lean on each other at the urging of Waddell and team captain Boone Jenner. And it will continue on Thursday, when the team opens training camp, exactly three weeks since the Gaudreaus were killed.

“Tragic. Senseless. But now we got to focus on trying to get our team ready to play hockey this year,” Waddell said. “We all mourn and heal differently, but I think as a team being together like that is going to be critical for them to get moving forward.”

Tragedy is no stranger to Waddell or the Blue Jackets.

Waddell was general manager of the then-Atlanta Thrashers in 2003 when Dany Heatley lost control of his car and struck a wall, with the crash killing passenger and teammate Dan Snyder. In 2021, Blue Jackets goalie Matiss Kivlenieks died during a July Fourth fireworks accident.

Waddell placed the emphasis on himself and coach Dean Evason — both newcomers to Columbus this offseason — to guide the team through what will be an emotional season.

“Now, do I think there’s going to be some dark days? I won’t be surprised,” Waddell said.

Reminders of the Gaudreaus’ deaths remain apparent, and reflected in Buffalo on Friday night. A moment of silence was held in tribute to the brothers before the opening faceoff of a game between the Blue Jackets and Sabres.

Afterward, Columbus prospect Gavin Brindley recalled the times he spent with Johnny Gaudreau in Columbus and as teammates representing the United States at the world hockey championships in the Czech Republic in May.

“He was one of the biggest mentors for me at the world championships,” Brindley said. “I couldn’t tell you how many times we hung out with Meredith, pictures on my phone. It’s just so hard to look back and see that kind of stuff.”

The NHL and NHL Players’ Association are providing the Blue Jackets help in the form of grief counseling, crowd security at vigils and addressing hockey issues, such as potentially altering the league’s salary cap rules to provide Columbus relief from having to reach the NHL minimum payroll because of the void left by Gaudreau’s contract.

“The Blue Jackets, I don’t think anybody’s focused from an organizational standpoint, from a hockey standpoint as to what comes next, because I think everybody’s still in shock,” NHL Commissioner Gary Bettman told The Associated Press last week. “I don’t think anybody’s focused right now other than on the grieving part, which is understandable.”

Much of the burden has fallen to Waddell, who has been in discussions with the NHL and the NHLPA and dealing with outreach programs with the Blue Jackets’ partner OhioHealth, while also overseeing preparations for training camp and gauging his prospects in Buffalo.

There’s also his roster to attend to, which he said has two openings at forward, one involving Justin Danforth, who may miss the start of the season because of a wrist injury. Waddell didn’t have to mention the second opening.

Tiring and emotional as it’s been, Waddell found comfort being in his element, a rink, and looking ahead to the start of training camp.

“The guys are in really good shape. We’ve done a lot of testing already and they’re eager to get going,” Waddell said. “We have a reason to play for. And we’ll make the best of it.”

The Blue Jackets later Sunday signed veteran winger James van Riemsdyk to a one-year contract worth $900,000.

“James van Riemsdyk has been a very consistent, productive player throughout his career,” Waddell said. “Bringing him to Columbus will not only provide depth to our group up front, but also valuable leadership and another veteran presence in our dressing room.”

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AP Hockey Writer Stephen Whyno in New York contributed to this report.

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PSG says defender Nuno Mendes target of racial abuse after a French league game

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PARIS (AP) — Paris Saint-Germain defender Nuno Mendes was the target of abusive and racist comments on social media after a French league game.

The club condemned the abuse and expressed its “full support” Sunday for the Portugal left back, who was targeted following PSG’s 3-1 win against Brest on Saturday.

Mendes, who is Black, shared on his Instagram account a racist message he received.

During the match, Mendes brought down Ludovic Ajorque in the box for a penalty that Romain Del Castillo converted to give Brest the lead.

“Paris Saint-Germain doesn’t tolerate racism, antisemitism or any other form of discrimination,” the club said. “The racial insults directed at Nuno Mendes are totally unacceptable … we are working with the relevant authorities and associations to ensure those responsible are held accountable for their actions.”

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Slovenia’s Tadej Pogacar wins Grand Prix Cycliste de Montreal

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MONTREAL – Tadej Pogacar was so dominant on Sunday, Canada’s Michael Woods called it a race for second.

Pogacar, a three-time Tour de France champion from Slovenia, pedalled to a resounding victory at the Grand Prix Cycliste de Montreal.

The UAE Team Emirates leader crossed the finish line 24 seconds ahead of Spain’s Pello Bilbao of Bahrain — Victorious to win the demanding 209.1-kilometre race on a sunny, 28 C day in Montreal. France’s Julian Alaphilippe of Soudal Quick-Step was third.

“He’s the greatest rider of all time, he’s a formidable opponent,” said Woods, who finished 45 seconds behind the leader in eighth. “If you’re not at your very, very best, then you can forget racing with him, and today was kind of representative of that.

“He’s at such a different level that if you follow him, it can be lights out.”

Pogacar slowed down before the last turn to celebrate with the crowd, high-five fans on Avenue du Parc and cruise past the finish line with his arms in the air after more than five hours on the bike.

The 25-year-old joined Belgium’s Greg Van Avermaet as the only multi-time winners in Montreal after claiming the race in 2022. He also redeemed a seventh-place finish at the Quebec City Grand Prix on Friday.

“I was disappointed, because I had such good legs that I didn’t do better than seventh,” Pogacar said. “To bounce back after seventh to victory here, it’s just an incredible feeling.”

It’s Pogacar’s latest win in a dominant year that includes victories at the Tour de France and Giro d’Italia.

Ottawa’s Woods (Israel Premier-Tech) tied a career-best in front of the home crowd in Montreal, but hoped for more after claiming a stage at the Spanish Vuelta two weeks ago.

“I wanted a better result,” the 37-year-old rider said. “My goal was a podium, but at the same time I’m happy with the performance. In bike racing, you can’t always get the result you want and I felt like I raced really well, I animated the race, I felt like I was up there.”

Pogacar completed the 17 climbs up and down Mount Royal near downtown in five hours 28 minutes 15 seconds.

He made his move with 23.3 kilometres to go, leaving the peloton in his dust as he pedalled into the lead — one he never relinquished.

Bilbao, Alaphilippe, Alex Aranburu (Movistar Team) and Bart Lemmen (Visma–Lease) chased in a group behind him, with Bilbao ultimately separating himself from the pack. But he never came close to catching Pogacar, who built a 35-second lead with one lap left to go.

“It was still a really hard race today, but the team was on point,” Pogacar said. “We did really how we planned, and the race situation was good for us. We make it hard in the last final laps, and they set me up for a (takeover) two laps to go, and it was all perfect.”

Ottawa’s Derek Gee, who placed ninth in this year’s Tour de France, finished 48th in Montreal, and called it a “hard day” in the heat.

“I think everyone knows when you see Tadej on the start line that it’s just going to be full gas,” Gee said.

Israel Premier-Tech teammate Hugo Houle of Sainte-Perpétue, Que., was 51st.

Houle said he heard Pogacar inform his teammates on the radio that he was ready to attack with two laps left in the race.

“I said then, well, clearly it’s over for me,” Houle said. “You see, cycling isn’t that complicated.”

Australia’s Michael Matthews won the Quebec City GP for a record third time on Friday, but did not finish in Montreal. The two races are the only North American events on the UCI World Tour.

Michael Leonard of Oakville, Ont., and Gil Gelders and Dries De Bondt of Belgium broke away from the peloton during the second lap. Leonard led the majority of the race before losing pace with 45 kilometres to go.

Only 89 of 169 riders from 24 teams — including the Canadian national team — completed the gruelling race that features 4,573 metres in total altitude.

Next up, the riders will head to the world championships in Zurich, Switzerland from Sept. 21 to 29.

Pogacar will try to join Eddy Merckx (1974) and Stephen Roche (1987) as the only men to win three major titles in a season — known as the Triple Crown.

“Today gave me a lot of confidence, motivation,” Pogacar said. “I think we are ready for world championships.”

This report by The Canadian Press was first published Sept. 15, 2024.



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