Loblaws Stepping up to Address Their Role in More Than a Decade of Bread Price Fixing

(Last Updated On: December 20, 2017)

On Tuesday, December 19th, 2017 George Weston Limited and Loblaw Companies Limited announced actions taken to address role in industry-wide price-fixing arrangement involving certain packaged bread products, including an offer to their customers to register and, if eligible, receive a $25 Loblaw Card which can be used to purchase items sold in Loblaw grocery stores across Canada. The anti-competitive behaviour was discovered in March of 2015 and immediately reported to the Competition Bureau by the companies. Employees responsible for Weston Bakeries’ and Loblaw’s role in this arrangement are no longer with the Companies.

According to a press release from Loblaw Companies Limited; “The Competition Bureau has commenced an investigation into a price-fixing arrangement. The arrangement involved the coordination of retail and wholesale prices of certain packaged bread products over a period extending from late 2001 to March 2015. Under the arrangement, the participants regularly increased prices on a coordinated basis. The participants included Loblaw and the Weston Bakeries division of George Weston as well as other major grocery retailers and another bread wholesaler, some of which have acknowledged being searched by the Competition Bureau as part of its ongoing investigation.”

“The searches were conducted under court filings made by the Competition Bureau on a confidential basis. Although those filings remain sealed under a court order, they were made available earlier today to the Companies and other affected parties for review. Having reviewed the court filings and advised the Director of Public Prosecutions of Canada as required, the Companies are making further public disclosure at this time. As the court filings remain sealed, the Companies’ disclosure at this time is limited to their knowledge of the Competition Bureau’s investigation, in which they have been cooperating as an immunity applicant since March 2015.”

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This sort of behaviour is wrong and has no place in our business or Canada’s grocery industry,” said Galen G. Weston, Chairman and Chief Executive Officer of both Companies. “This should never have happened.

As a result of their admission that they participated in the arrangement and their cooperation with the Competition Bureau’s investigation, the Companies will not face criminal charges or penalties.

In response, Loblaw Companies Limited have taken described in their release, four distinct courses of action;

First, upon discovering this anti-competitive behaviour in March 2015, the Companies immediately reported it to the Competition Bureau and they have been co-operating fully with the Competition Bureau. In doing so, the Boards of Directors of the Companies initiated a thorough investigation to get to the bottom of what happened, address it and report to the Competition Bureau. During the period in which the Companies were awaiting the Competition Bureau’s determination as to whether it would proceed against other parties, they were required under competition legislation to keep their cooperation confidential.

Second, the employees responsible for Weston Bakeries’ and Loblaw’s role in this arrangement are no longer with the Companies.

Third, Loblaw is offering customers a $25 Loblaw Card, which can be used to purchase items sold in Loblaw grocery stores across Canada. Starting on January 8, 2018, Loblaw customers can visit www.LoblawCard.ca to register and, if eligible, receive a card. The deadline for registration is May 8, 2018. In the meantime, customers can visit www.LoblawCard.ca to request a notification when registration opens.

Fourth, the Companies have significantly enhanced their compliance programs with measures that are both industry-leading and go further than the Competition Bureau’s own requirements. These measures include the following:

 


Background Information

Canada’s food and pharmacy leader, with a network of corporate and independently- operated stores in communities across the country, and employing close to 200,000 Canadians.
Loblaw’s purpose – Live Life Well – supports the needs and well-being of Canadians who make one billion visits each year to the company’s stores. Loblaw is positioned to meet and exceed those needs in many ways: convenient grocery locations that span the value spectrum from discount to specialty; full-service pharmacies; no-fee banking; affordable fashion and family apparel; and, three of Canada’s top consumer brands in President’s Choice®, Life Brand®, and no name®. Loblaw operates five independent divisions.

Founded in 1882, George Weston Limited (“Weston”) is a major Canadian public company, representing Canada’s largest food and drug retail businesses through its control of Loblaw Companies Limited (“Loblaw”) and Loblaw’s recent acquisition of Shoppers Drug Mart. With over 2,300 stores the retail operations reach most Canadians serving their everyday food, health and wellness needs. Through Weston Foods, Weston is one of Canada’s leading bakers, offering a wide selection of fresh and frozen products to the North American market. Weston also controls one of Canada’s largest REITs, Choice Properties REIT.  With over 200,000 employees, Weston is Canada’s largest private sector employer.

Post Author: Joanne Francis