Loblaw blew whistle on its own price-fixing

OFFERS $25 GIFT CARD

George Weston Ltd. revealed Tuesday the bakery owner and grocer Loblaw Cos. Ltd. alerted the Competition Bureau after discovering a more- than- decade- long bread price- fixing arrangement and will receive immunity from criminal charges.

The companies said in a joint statement Tuesday that they became aware of an arrangement involving the co- ordination of retail and wholesale prices of some packaged breads from late 2001 to March, 2015. As a result of their admission to the competition watchdog, neither company will face criminal charges or penalties, they said.

“This sort of behaviour is wrong and has no place in our business or Canada’s grocery industry,” said Galen Weston, chairman and chief executive officer of both companies. “This should never have happened.”

Loblaw is offering eligible customers who register online at LoblawCard. ca before May a $ 25 gift card that can be used at its grocery stores across Canada. Loblaw will book a $ 75 million to $150 million quarterly charge in relation to the program.

The price- fixing participants regularly increased prices on a co- ordinated basis, and participants included both companies, as well as other major grocery retailers and another bread wholesaler, the statement said.

Last month, the Competition Bureau executed warrants to search the offices of certain grocers to gather evidence, but that there had been no conclusion of wrongdoing and no charges had been laid.

Metro Inc. said at the time that the investigation concerns certain suppliers and Canadian retailers, and that it was fully co- operating.

Sobeys I nc. , Canada Bread and Walmart Canada also said they were fully cooperating.

The s t atement i ssued Tuesday by Loblaw and George Weston said the employees responsible for Weston Bakeries and Loblaw’s role in the arrangement are no longer employed by the companies and that the companies have beefed up compliance programs.

The companies established an independent compliance office earlier this year and provided compliance training and re- certification to marketing personnel at Weston Bakeries and all merchants and store managers at Loblaw, as well as senior managers at both companies and at parent company George Weston.

The companies might also book charges related to damages in the coming quarters but said their cash balances “far exceed any realistic damages scenario.”

The added disclosure came after sealed court filings into the matter were made available to the companies and other affected parties for review.