Canada Bread Fined for Price Fixing

Facts

• On Wednesday, baked goods maker Canada Bread pleaded guilty to engaging in a years-long price-fixing scheme with competitors and will pay a fine of $50M CAD ($38M) for the violation — the highest price-fixing fine ever imposed by a Canadian court.¹
• A Competition Bureau investigation found that executives at Canada Bread, owned by Maple Leaf Foods until Mexico's Grupo Bimbo acquired it in 2014, "had discussions about prices" for bread products with one or more senior executives at rival baker Weston Foods in 2007.²
• In 2007, Canada Bread agreed to increase its prices by 12 to 14 cents, with Weston later bumping its prices by 16 cents. In late 2010 to early 2011, they again agreed to hike prices by another seven cents before executing slightly different, but higher increases.³
• The Bureau first launched its investigation in 2015 after Weston and fellow bread competitor Loblaws offered information in exchange for prosecutorial immunity. After that, it obtained search warrants for grocery and food companies, including Metro Inc., Sobeys Inc., and Walmart Canada.²
• The Bureau added that Canada Bread "received leniency in sentencing in return for its full co-operation," also emphasizing that the "senior leadership of Canada Bread responsible for the price-fixing is no longer with the company."³
• The plea deal comes as the competition watchdog is expected to complete another investigation this month into Canada's grocery sector, which it launched last year amid rising food prices. Grocery owners claim that price increases are merely the result of inflation.¹

Sources: ¹BBC News, ²CBC, and ³The Record.

Narratives

• Left narrative, as provided by CBC. The Canada Bread price-fixing scandal is part of a much larger bug in the Canadian marketplace. Investigations into grocery cartels have continually been launched since the early 2000s, though the problem is far from fixed and market competition is still not free and fair. Government investigations and class-action lawsuits shouldn't only bring punishment to companies but also financial compensation to regular Canadians struggling with high prices.
• Right narrative, as provided by Forbes. While it's important to prevent price-fixing, governments must not use economic struggles and bad faith companies as an excuse to begin price-fixing themselves. As has been the case in Venezuela since the Hugo Chavez regime, artificially lowering prices leads to more demand without an equal supply. Therefore, as people in Caracas wait three hours in line for rice, they're wasting time and money, which actually makes life more expensive.