Price-fixing tipoff gives Loblaw immunity

Participants increased costs on regular, co-ordinated basis

George Weston Ltd. and Loblaw Cos. Ltd. revealed Tuesday that both the bakery owner and grocer participated in an industry-wide bread pricefixing arrangement for more than a decade, but will receive immunity after tipping off Canada’s competition watchdog.

“This is a difficult matter and clearly something that never should have happened,” said Galen G. Weston, CEO of both companies, in a conference call with analysts.

The companies became aware of an arrangement involving the co-ordination of retail and wholesale prices of some packaged breads from late 2001 until March 2015, they said in a joint statement.

They notified the Competition Bureau and have co-operated as an immunity applicant since March 2015.

“As a result of the co-operation we have provided to the Competition Bureau, neither George Weston Ltd. nor Loblaw or their respective employees will face criminal charges or penalties,” Weston said.

The companies said participants in the industry-wide arrangement included Loblaw, George Weston’s bakery division, as well as other major grocery retailers and another bread wholesaler, adding they regularly increased prices on a co-ordinated basis.

Last month, the Competition Bureau executed warrants to search the offices of certain grocers to gather evidence, but said that there had been no conclusion of wrongdoing and no charges had been laid. Both the competition watchdog and Canadian retailers have remained tight-lipped on further details.

Metro Inc. said at the time that the investigation concerns certain suppliers and Canadian retailers, and that it was fully co-operating. A spokesperson said the company would not comment on George Weston and Loblaw’s admission.

Sobeys Inc., Canada Bread and Walmart Canada also said they were fully co-operating.

The three companies and Sobeys’s parent company, Empire Co. Ltd., did not immediately respond to a request for comment.

Loblaw and George Weston said they’ve taken several steps since discovering the arrangement to beef up compliance programs.

The employees responsible for the companies’ role in the arrangement are no longer employed there.

Canada’s Competition Act prohibits agreements that “prevent or unduly lessen competition or to unreasonably enhance the price of a product,” according to the bureau.

The Competition Act prohibits agreements that ‘prevent or unduly lessen competition or to . . . enhance the price of a product’