Business

It's been 5 years since the bread price-fixing probe started. We still don't have any answers

The Competition Bureau is still investigating Canada's infamous bread price-fixing scheme — almost five-and-a-half years after launching the probe in 2017.

Lack of results is eroding Canadians' trust at a time of escalating food prices, expert says

In 2015, Loblaw confessed to taking part in what the Canadian Competition Bureau alleges was an industry-wide bread price-fixing scheme that included several major grocers. Loblaw offered customers $25 gift cards to make amends. (Evan Mitsui/CBC)

Consumer furor over rising food prices has reignited anger over the infamous bread price-fixing scandal, which became public in 2017 and allegedly involved several major grocers colluding to inflate bread prices. 

"It's time to get answers," said anti-poverty activist Irene Breckon, 76, of Elliot Lake, Ont. "It's not right that the poor people are suffering so much more, and the rich people … keep bumping up their prices."

According to data released Tuesday, grocery prices have climbed by 11 per cent year over year. 

The federal government is working on a grocery code of conduct to help foster competition in the industry. And in response to allegations grocers are raking in excessive profits, both the government and Canada's Competition Bureau are examining grocery pricing in Canada.

An image of Irene Breckon taken during a Zoom interview with CBC News.
Anti-poverty activist Irene Breckon of Elliot Lake, Ont., wants to see action taken both on soaring food prices and Canada's bread price-fixing scandal. (CBC)

During a parliamentary committee hearing last month, Loblaw Companies Ltd. (which owns Loblaws and Superstore) and Empire Company Ltd. (owners of Sobeys and Safeway), said they're not profiteering but, instead, are passing on higher costs from suppliers. 

Meanwhile, the Competition Bureau is still investigating the bread price-fixing scheme — almost five-and-a-half years after launching the probe on Aug. 11, 2017. 

No charges have been laid and the competition watchdog says there is no conclusion of wrongdoing at this time. 

"The Bureau must conduct a thorough review of all the facts of a case before reaching any conclusions regarding potential violations of the law," said spokesperson Marie-Christine Vézina in an email.

She offered no timeline, and said, by law, the bureau must conduct its work confidentially.

8 years since Loblaw tip

Almost eight years ago in March 2015, Loblaw alerted the Competition Bureau to its part in an allegedly industry-wide price-fixing agreement to artificially inflate the price of some packaged bread from 2001 to 2015. 

Loblaw received immunity from prosecution for its co-operation. It then offered customers $25 gift cards to make amends.

In 2017, the bureau began investigating other alleged parties: grocers Sobeys, Walmart, Metro and Giant Tiger, and producer and distributor Canada Bread. According to court records, in 2019, it also targeted Maple Leaf Foods, which was the majority shareholder of Canada Bread until 2014. 

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Sylvain Charlebois, Director of Agri-Food Analytics Lab at Dalhousie University, says costs for the big grocery chains have legitimately gone up, but the industry as a whole is taking a lot of heat from consumers for higher food prices right now.

Food distribution expert Sylvain Charlebois claims the investigation is taking too long, and that the lack of results is eroding Canadians' trust at a time of escalating food prices.

"The grocers' crisis of confidence has a lot to do with the fact that there's still unfinished business out there," said Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University. "You need to move on this issue."

But competition law expert Jennifer Quaid said it can take time to gather evidence needed to prove a price-fixing conspiracy.

'[It's] particularly difficult when you're talking about large, economically powerful entities," said Quaid, a law professor at the University of Ottawa. "You can't just sort of snoop on them, right? We don't have a police state."

Other grocers respond

In 2004, the Competition Bureau launched what turned out to be a three-year investigation into allegations of price-fixing at gasoline stations in Quebec. By 2008, 13 people and 11 companies faced criminal charges in the case, and by 2009, the majority of them had pleaded guilty.

Quaid suggests that investigation had a speedier outcome because a number of people implicated agreed to assist with the bureau's investigation. 

"The defining feature there is that because people co-operated and got immunity, they were able to get wiretaps. They were able to catch people calling each other."

Competition law expert Jennifer Quaid says it can take time to gather evidence needed to prove a price-fixing conspiracy. (Matthew Kupfer/CBC)

Even though Loblaw is co-operating with the price fixing investigation, Quaid said it may be taking longer than expected because none of the other alleged parties appears to be offering a confession and co-operation in exchange for leniency. 

Sobeys, Walmart and Giant Tiger each told CBC News they have no reason to believe they violated the Competition Act. 

"We have steadfastly fought against these irresponsible allegations," wrote Sobeys spokesperson Tshani Jaja in an email. 

Metro said it complies with the law and "has never been found to be in breach of the Competition Act."

Mexican multinational company Grupo Bimbo, which acquired Canada Bread in 2014, declined to comment. Maple Leaf Foods said it was unaware of any wrongdoing at Canada Bread when it was the majority shareholder. 

Quaid said the biggest risk with a lengthy investigation is that, over time, it may be more difficult to secure evidence.

"For example, it might be harder to track down the people who were involved. Maybe they've moved on, maybe they work somewhere else, maybe they've died."

Even if no charges are laid as a result of the investigation, it won't be case closed for the bread price-fixing saga. That's because two class-action lawsuits, one in Ontario and one in Quebec, have been certified in court, each seeking financial compensation from companies allegedly involved. 

If nothing else, anti-poverty activist Breckon hopes the lawsuits will result in some extra cash for class-action members who may be struggling with high food prices. 

"I know so many people that are having an extremely difficult time," she said. 

ABOUT THE AUTHOR

Sophia Harris

Business reporter

Based in Toronto, Sophia Harris covers consumer and business for CBC News web, radio and TV. She previously worked as a CBC videojournalist in the Maritimes where she won an Atlantic Journalism Award for her work. Contact: sophia.harris@cbc.ca

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