GATINEAU, QUE. — Canada Bread Co., Ltd. has been fined C$50 million ($38 million) after pleading guilty for its role in an industry-wide price-fixing arrangement involving certain packaged bread products. The fine, which was administered by the Ontario Superior Court, is the highest price-fixing fine imposed by a Canadian court.

At the time of the price-fixing (late 2001 to March 2015), Canada Bread was under the ownership of Maple Leaf Foods. Grupo Bimbo SAB de CV acquired Canada Bread Co. from Maple Leaf in 2014. The senior leadership of Canada Bread responsible for the price-fixing is no longer with the company.

Canada Bread pleaded guilty to four counts of price-fixing under the Competition Act. In entering its guilty plea, Canada Bread admitted that it arranged with its competitor, Weston Foods (Canada) Inc., 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, according to Competition Bureau Canada. 

“In 2014, Canada Bread was acquired by Grupo Bimbo,” Grupo Bimbo said. “It is crucial to highlight that Grupo Bimbo was not aware of, nor did due diligence uncover, the conduct prior to its acquisition of the Company. It was only in 2017 that Canada Bread’s parent company learned about the conduct. Since then, Canada Bread has provided full and consistent cooperation with the Competition Bureau.

“Canada Bread is considering all legal options against those responsible for the conduct at issue. Canada Bread is committed to delivering high quality products and maintaining the trust of our customers. We take great pride that our products are made for Canadians, by Canadians.”

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 cooperation and guilty plea, the Competition Bureau said.

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

George Weston Ltd. and Loblaw Companies Ltd. admitted to their role in the price-fixing arrangement back in December 2017.  At that time, Galen G. Weston, chairman and chief executive officer of George Weston Ltd. and Loblaw Companies, described the price-fixing and subsequent investigation as “a difficult matter” and “clearly something that never should have happened.”

“In March 2015 we uncovered information that raised concerns,” he said. “We immediately reported what we had found to the Competition Bureau and have been cooperating fully with the Bureau since.”

Mr. Weston said the Competition Bureau was not investigating the price-fixing allegations prior to being alerted by Loblaw and George Weston in March 2015.

He added, “We can’t speculate on which parties the Bureau will pursue or in relation to which bread products or what time period.”

In exchange for their full cooperation with the Competition Bureau’s investigation, Weston Foods, Loblaw Companies Ltd., both subsidiaries of George Weston Ltd., received immunity from prosecution.