It has been 5 years since the investigation into price agreements for bread began. We still don’t have answers
Consumer anger at rising food prices has fueled anger over the infamous bread price fixing scandal, which went public in 2017 and reportedly saw several major grocers conspire to drive up 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 suffer so much more, and the rich people… keep driving up their prices.”
According to data released Tuesday, food prices have increased by 11 percent year after year.
The federal government is working on a code of conduct for supermarkets to promote competition in the sector. And in response to allegations, grocers are making exorbitant profits, both government and Canada’s Competition Bureau examine the prices of supermarkets in Canada.
At a parliamentary committee hearing last month, Loblaw Companies Ltd. (owner of Loblaws and Superstore) and Empire Company Ltd. (owners of Sobeys and Safeway) that they do not make a profit, but instead pass on higher costs to suppliers.
Meanwhile, the Competition Bureau is still investigating the bread price-fixing system – almost five and a half years after the investigation was launched on August 11, 2017.
No charges have been filed and the competition watchdog says there is no finding of wrongdoing at this time.
“The Bureau must thoroughly review all the facts of a case before drawing conclusions about possible violations of the law,” spokesperson Marie-Christine Vézina said in an email.
She did not give a timetable and said that by law the agency must do its work confidentially.
High food prices stir Canadians Grocery stores have become a lightning rod for consumer discontent amid inflation and lingering distrust following a bread price-fixing scandal.
8 years since the Loblaw tip
Nearly eight years ago, in March 2015, Loblaw warned the Competition Bureau to its part in a so-called industry-wide price fixing to artificially inflate the price of some types of packaged bread between 2001 and 2015.
Loblaw was granted immunity from prosecution for his cooperation. Then it offered customers $25 gift cards to make up for it.
In 2017, the agency began investigating other alleged parties: grocers Sobeys, Walmart, Metro and Giant Tiger, and producer and distributor Canada Bread. It also targeted Maple Leaf Foods in 2019, according to court records majority shareholder of Canada Bread until 2014.
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Food distribution expert Sylvain Charlebois claims the investigation is taking too long and the lack of results is eroding Canadians’ confidence at a time of rising food prices.
“The grocers’ competency crisis has a lot to do with the fact that there are still unfinished business,” said Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University. “You have to move on with this matter.”
But competition law expert Jennifer Quaid said it may take time to collect evidence needed to prove a price-fixing conspiracy.
‘[It’s] especially difficult when you’re talking about large, economically powerful entities,” said Quaid, a law professor at the University of Ottawa. “You can’t just spy on them, can you? We don’t have a police state.”
Other grocers respond
In 2004, the Competition Bureau started what turned out to be a three-year investigation allegations of price fixing at gas stations in Quebec. In 2008, 13 people and 11 companies were prosecuted in the case, and in 2009 the majority of them had pleaded guilty.
Quaid suggests the investigation had a faster outcome because a number of individuals involved agreed to assist in the agency’s investigation.
“The defining characteristic there is that because people cooperated and got immunity, they could get eavesdropping. They could catch people calling each other.”
Although Loblaw is cooperating with the price-fixing investigation, Quaid said it could take longer than expected because none of the other alleged parties appear to be offering a confession and cooperation in exchange for clemency.
Sobeys, Walmart and Giant Tiger each told CBC News they have no reason to believe they have violated the Competition Act.
“We have fought steadfastly against these irresponsible allegations,” Sobeys spokesman Tshani Jaja wrote in an email.
Metro said it complies with the law and “has never been found in violation of the Competition Act”.
Mexican multinational Grupo Bimbo, which acquired Canada Bread in 2014, declined to comment. Maple Leaf Foods said it was not aware of any wrongdoing at Canada Bread when it was the majority shareholder.
Quaid said the biggest risk of a lengthy investigation is that it will become more difficult to secure evidence over time.
“For example, it is more difficult to track down those involved. Maybe they moved, maybe they work somewhere else, maybe they died.”
Even if no charges are filed as a result of the investigation, the bread price fixing case will not be closed. That’s because two class action lawsuits, one in Ontario and one in Quebecare certified in court, each seeking financial compensation from companies allegedly involved.
In any case, the anti-poverty activist Breckon hopes the lawsuits will bring in some extra money for group action members who may be struggling with high food prices.
“I know so many people who are having an extremely difficult time,” she said.