CANADA—For years, the price of a loaf of bread crept upward with a stubborn regularity that many shoppers chalked up to inflation or changing food costs. What Canadians did not know was that for more than a decade, some of the country’s biggest grocers and bread suppliers were quietly facilitating those increases together.
The scandal began in 2001 and over the next 14 years, investigators say, companies involved in the packaged-bread business raised prices in small, synchronized steps. To the average customer, each bump of 10 or 20 cents a loaf just looked like ordinary retail pricing. But the federal Competition Bureau later found a pattern of coordination among at least seven companies that held back competition and kept bread prices artificially high until at least 2015.
The scandal came fully into the public view in 2017, when Loblaw Companies Limited, being the nation’s largest grocer, admitted its part in what would come to be widely known as the “bread conspiracy.” Loblaw’s parent company, George Weston Ltd., and its bakery subsidiary, Weston Foods, was also implicated. To many Canadians the admission felt like a major betrayal: bread represents one of the most basic of family staples, a weekly purchase for almost every household to help feed hungry bellies and make countless work and school lunches.
In 2018 Loblaw tried to do damage control and soothe public anger with a $25 gift card program. Nearly two million Canadians signed up for these cards. The gesture offered a quick, visible remediation to an otherwise catastrophic PR nightmare, but it also helped set the stage for this later legal action and its ensuing settlement negotiations.
Many have asked how could a scheme such as this persist for so long? The answer lies in the hierarchy of Canada’s grocery market landscape. While the country appears to have more than 11,000 grocery businesses on paper, the real control of what ends up on grocers’ shelves resides in the hands of a small number of national players. Loblaw, Sobeys, Metro, Walmart and Costco — often referred to as the Big Five — dominate national sales and together, hold most the lion’s share of the market sales and suppliers.
That concentration of power changes everything about how the game is played. In many communities, particularly outside major cities such as Manitoulin Island, shoppers have limited options from which to get their food. They can choose between a national chain, perhaps a second chain, and a handful of smaller artisnal specialty shops. True independent grocers are very scarce and often dependent on the same wholesalers that supply the big chains. As such, the costs of logistics, distribution and supplier contracts make it very difficult, if not impossible, for new entrants to challenge the entrenched players who’ve essentially cornered the market. This concentration of power within the hands of a very select and dominant few is what made these parallel moves on pricing possible and much harder to for anyone to detect.
The Competition Bureau’s findings echoed what critics of market concentration have long argued: it’s not really about the total number of stores that matters, but rather who controls them and their suppliers. When market power is concentrated, the temptation and ability to coordinate pricing rises and almost always results in consumers paying the price.
The legal consequences unfolded slowly. The class-action lawsuit against Loblaw Companies Limited and George Weston alleged a 14-year, industry-wide conspiracy to fix prices on packaged bread between 2001 and 2015. The plaintiffs argued that the scheme led to an artificial increase in retail prices and harmed virtually every Canadian family that bought packaged bread over that period.
On May 7, Ontario Superior Court Justice Ed Morgan approved a $500-million settlement with Loblaw and George Weston, describing the money put forward as “an excellent and fair result for all concerned.” The settlement represents one of the largest antitrust settlements in Canadian history, and it capped years of litigation and regulatory scrutiny.
Jay Strosberg, the lead lawyer for the plaintiffs, stressed the scale of the fallout. “We’re talking about almost everyone in the country who is probably impacted by this conspiracy,” he said, noting that the settlement’s reach was unusually broad.
The settlement breaks down into roughly $404 million in cash combined from Loblaw and George Weston, plus $96 million that reflects Loblaw’s earlier gift card program. Legal fees and administrative costs will be deducted from that total, and then 78 percent of the net funds will be directed to shoppers outside Quebec, with the remainder set aside for Quebec residents once that province’s courts decide whether to approve a similar legal action.
The result — if you bought packaged bread in Canada between January 1, 2001 and December 31, 2021, you may be eligible to share in the settlement. The arrangement creates two classes: one covering all Canadian residents outside Quebec and a second covering Quebec residents only. The Ontario and Quebec settlements have since been approved and are going ahead after both regions’ Superior Courts approved the settlement.
While allegations in the suit named other major grocers, including Sobeys, Walmart, Giant Tiger and Metro, only Loblaw and its parent company have agreed to a settlement so far. Canada Bread was separately fined $50 million in June 2023 after pleading guilty to four counts of price-fixing under the Competition Act, a rare instance of criminal conviction in an industry-wide case.
Do consumers have to prove their purchases to qualify for the lawsuit? The short answer is no. The settlement recognizes the impracticality of expecting people to hold receipts for nearly two decades. As Jay Strosberg explained in earlier interviews, consumers will be required to submit a claim and provide information and documentation “as may be required,” but that will not include receipts for every purchase.
Eligibility is automatic in the sense that residents who fall within the class definitions are included. To receive compensation, though, people will have to register claims through the official settlement websites. For Ontario and the rest of Canada, the site is www.canadianbreadsettlement.ca
This Expositor reporter registered after it was reported that several people had been having a hard time signing up. However, the process was linear and simple. People wishing to join in on the claim simply have to visit the site, select their respective regions and provide some key information. As was stated previously, no receipts are required, though this reporter did have to give a quick statement about previous bread purchases and where they were acquired. A few quick clicks later and it was done. A claim number is provided, along with a password for the eventual e-transfer which will remit the return.
