June 24, 2023
On June 21, 2023, Canada’s federal Competition Bureau (Bureau) announced that Canada Bread had been sentenced by the Ontario Superior Court to a CDN $50 million fine after pleading guilty to fixing wholesale bread prices in Canada.
This recent Canadian criminal price-fixing fine is the highest price-fixing fine imposed by a Canadian court to date. For more information, see: Canada Bread sentenced to $50 million fine after pleading guilty to fixing wholesale bread prices (June 21, 2023). For more information about criminal price-fixing under the Competition Act in Canada, see: Conspiracy (Cartels).
In making this announcement, Canada’s Commissioner of Competition (Matthew Boswell), said:
“Fixing the price of bread, a food staple of Canadian households, 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.”
Canada Bread, upon recommendation from the Bureau, received leniency in sentencing under the Bureau’s Leniency Program for cooperating in the Bureau’s investigation. For more information about the Bureau’s Immunity and Leniency Programs, which can provide either full immunity from criminal prosecution or negotiated leniency in criminal sentencing if the requirements of either of the Bureau’s programs are met, see: Competition Bureau Immunity and Leniency Programs.
According to the Bureau, Canada Bread admitted that it had arranged with its competitor Weston Foods (Canada) Inc. to increase the prices for various bagged and sliced bread products (e.g., sandwich bread, hot dog buns and rolls), which resulted in two price increases in 2007 and 2011.
In the Bureau’s announcement, it stated that its investigation into alleged bread related price-fixing by other companies, including Metro Inc., Sobeys Inc., Wal-Mart Canada Corporation, Giant Tiger Stores Limited and Maple Leaf Foods Inc. is ongoing. It remains to be seen whether any corporate executives will be charged or will plead guilty.
The Bureau has been investigating this bread price-fixing matter for about six years. In this regard, in December 2017, Weston Foods and Loblaw Companies Limited announced their participation in what they described as an “industry-wide price-fixing arrangement”, which involved the coordination of retail and wholesale bread prices.
In exchange for their cooperation with the Bureau’s investigation, Weston, Loblaw and GWL received full immunity from prosecution. For more information about the Bureau’s Immunity and Leniency Programs, see: Competition Bureau Immunity and Leniency Programs.
As part of its ongoing criminal price-fixing investigation, the Bureau has executed criminal search warrants against Canada Bread, Weston, Loblaw, Metro, Sobeys, Wal-Mart Canada, Giant Tiger, Overwaitea Food Group Limited and Maple Leaf Foods Inc.
For more information about the Bureau’s investigation powers, see: Competition Act Enforcement, Competition Bureau Complaints, Immunity and Leniency Programs and Whistleblowers.
There is also a parallel civil price-fixing class action running alongside the Bureau’s ongoing criminal investigation into alleged bread price-fixing in the Canadian grocery market. For more information, see: Ontario Superior Court Certifies $5 Billion Canadian Bread Price-Fixing Conspiracy Class Action.
In addition to the above ongoing criminal investigation and civil price-fixing proceedings, Canada’s Competition Act was recently amended to further increase the potential penalties for a number of Competition Act criminal offences, including price-fixing in which the former maximum penalty of $25 million was repealed and now allows courts to set criminal price-fixing fines in their discretion. For more information, see: Competition Act Amendments.
For more information about complying with Canada’s civil and criminal competition laws under the Competition Act, see: Canadian Competition Law Compliance.
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