Bakery employee alleged to be instigator of bread price-fixing
Lawyer for ‘Person X’ disputes newly released details, says ‘there’s no evidence whatsoever’
An employee of one of Canada’s largest bakeries allegedly made a Power Point presentation at an industry gathering about low bread profits and had a plan to orchestrate price increases with retailers, according to information made public Thursday about the Competition Bureau’s investigation into an alleged bread price-fixing cartel.
The new information is contained in Information to Obtain documents in the case; ITO applications contain unproven allegations made before a judge to obtain search warrants. They are untested.
The ITOs were released earlier this year, but several paragraphs that had been under a publication ban were made public on Thursday and they point to an employee of Canada Bread as the originator of the alleged cartel.
“There is no evidence whatsoever against our client,” said Scott Fenton, the lawyer representing the former Canada Bread employee, deemed Person X.
“In fact, the testimony of the source who received immunity, in return for implicating others, is highly suspect,” Fenton said in a news release on Thursday.
“This is a shoddy warrant built on false allegations, assumptions, inferences and innuendo that would rightly be inadmissible in any court.”
Fenton was successful in having his client’s name kept from the public on the grounds that his client is innocent; the allegations remain unproven and were based on one person’s remembrance of one conversation that occurred more than a decade ago; that no charges have been laid; and the investigation is ongoing and still in its early stages.
“Our client had no incentive to engage in price fixing, did not do so and never would. As the investigation continues, our client hopes the truth comes to light and justice will be served,” Fenton wrote.
Loblaw Cos. Ltd. and George Weston Ltd. have admitted involvement in an allegedly industry-wide price-fixing arrangement. Canada’s other grocers have denied involvement.
In exchange for bringing the alleged cartel to light Loblaw Cos. and George Weston and their officials were granted immunity by the Competition Bureau.
The alleged price-fixing took place between 2001 and March 2015.
Loblaw did not respond to a request for comment on the latest development.
The newly public paragraphs fall under a heading in the ITOs entitled: “Genesis of the alleged conspiracy.”
The half-dozen paragraphs are based on testimony from an anonymous witness, who was granted immunity, who said that they were approached by someone from Canada Bread at an unidentified industry conference. The year is not specified. The Canada Bread employee allegedly pointed to price fixing in another, unnamed industry and said: “There’s no reason the bakery business shouldn’t do the same.”
According to the witness as cited in the ITO, the Canada Bread employee gave a PowerPoint presentation showing that fresh bakery items could be more profitable: “Person X did comparisons to cereal and other grain-based products to show that bread was undervalued, but particularly undervalued when it came to profitability.”
Canada Bread, which was purchased from Maple Leaf Foods in 2014 by Grupo Bimbo of Mexico, denies involvement.
“These are all allegations; they are one side of the story. They are Weston’s version of the story,” said Sylvia Sicuso, a Canada Bread spokesperson.
Metro, Sobeys and Giant Tiger continued Thursday to deny any involvement in a bread cartel.
“We see no evidence of any Sobeys involvement and we reiterate, yet again, that we have seen absolutely no indication that Sobeys contravened competition law,” spokesperson Cynthia Thompson said.
“We continue to question the merits of the Competition Bureau’s widespread investigation and I would say that we are appalled that our name, and probably other names, have been unfairly dragged through the mud and we will strenuously respond to those who have tried to tarnish our brand.”
Aspokesperson for Metro said the corporation does not believe it or any of its employees violated the Competition Act.
“At this stage, the corporation does not believe that these matters will have a material adverse effect on the corporation’s business, results of operations or financial condition,” said Metro’s Marie-Claude Bacon.
Walmart and Giant Tiger also denied involvement.
“Walmart Canada takes its legal obligations very seriously. We believe our employees did not violate the Competition Act,” a spokesperson said.
“We have no reason to believe that Giant Tiger or any of our employees has violated the Competition Act. We have cooperated fully in the investigation, respect the process and are looking forward to seeing the results of the investigation,” said Alison Scarlett, a spokesperson for the retail chain, which also sells groceries.
The Competition Bureau declined to respond to Fenton’s criticism of its case, but a spokesperson said the agency had reasonable grounds to believe that an offence had been committed.
“Specifically, the bureau believes that suppliers and retailers had conspired to fix the wholesale and retail price of fresh commercial bread in Canada,” Marcus Callaghan wrote in response to questions from the Star.
“Following the bureau’s application, the Ontario Superior Court of Justice granted search warrants based on evidence that there are reasonable grounds to believe that certain individuals and companies have engaged in activities contrary to the Competition Act.
“There is no conclusion of wrongdoing at this time and no charges have been laid.”
It could take years for the case to conclude, according to the Ontario Superior Court justice who ruled in favour of Fenton’s application to keep his client’s identity a secret.
Justice Lynn Ratushny agreed that revealing the Canada Bread person’s name would put them at risk of irreversible personal, reputational, economic and professional prejudice.
The person in question was only employed by Canada Bread for about six months during the period that the alleged price fixing took place, according to information in Ratushny’s decision in the matter.
Several Canadian media organizations had sought to reveal the identity of Person X.