A Canadian watchdog group that monitors fair competition within the country has uncovered information that alleges that two of the largest wholesalers for bread were involved in a 16-year-long price-fixing scandal, the CBC reported.
In court documents revealed on Wednesday that were, until recently, sealed, the watchdog group found that senior officers from Canada Bread Company Ltd. and George Weston Ltd. had met with five retailers to make a deal about hiking the prices of bread. If charged, the Competition Bureau believes that the two wholesalers could be convicted for committing indictable offences under the Competition Act.
The raise, which was said to be seven cents, began happening back in 2001 and is suspected to have continued into 2017.
After the price was set, the suppliers then met with the five retailers – Loblaws, Walmart, Sobeys, Metro and Giant Tiger – to get the green light for making the increase. This increase, however, was only agreed upon after the retailers got confirmation that the competition would maintain a fixed price on the bread.
“Further, the retailers demanded that the suppliers actively manage retail competition by co-ordinating retail prices for their respective fresh commercial bread products and ensuring pricing alignment amongst the retailers,” the CBC reported the documents as reading.
With the bread price increasing at wholesale by seven cents, the retail price would then reflect a price bump of 10 cents; this scaling system became known as the ‘7/10’.
Investigation into this matter began back in December, after Loblaw and George Weston stepped forward to the watchdog and confessed to their involvement in the industry-wide conspiracy. Because of their forthcomingness, these two have received immunity in the ongoing investigation, while the remaining companies are said to be cooperating.
In a statement issued from Loblaws spokesperson Kevin Groh, he asserted that the company had “admitted” their role, but that “you cannot price fix alone”.
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