A Windsor lawyer leading the charge against companies allegedly involved in a nationwide bread price-fixing conspiracy says the historic $500-million settlement against Loblaw and its parent company is just the beginning.
Jay Strosberg said the focus now turns to Metro, Walmart Canada, Giant Tiger, Sobeys and Canada Bread Co. — all companies alleged to have also been part of a 14-year industry-wide scheme to artificially raise bread prices for consumers.
The settlement announced Thursday with Loblaw and bakery giant George Weston Ltd. includes an agreement that they will co-operate with class-action suits against the other companies.
“We’re going to have access, and I can’t emphasize enough that the co-operation is extensive by any means,” Strosberg, managing partner at Strosberg Wingfield Sasso LLP,told the Windsor Star.
“At this point, I’d prefer to just go to trial because we’re going to have the evidence to go to trial. They can fight or not, but those companies should be a bit concerned right now if you look at the amount that Loblaws had to pay.”
It’s the largest antitrust settlement in Canadian history. Strosberg said “many millions” of Canadians will likely be eligible for a payout.
By any measure, it’s massive in terms of scale
Following two class action lawsuits, Loblaw will pay out $252.5 million. George Weston Ltd. will pay $247.5 million.
The settlement amount includes $96 million Loblaw previously paid out to customers in 2018 in the form of $25 gift cards after the price-fixing scheme was revealed.
“Adjusted on per-capita basis, it’s one of the largest settlements in the world, frankly,” said Strosberg. “So, by any measure, it’s massive in terms of scale.”
Galen Weston, chairman of Loblaw and CEO of George Weston, issued a statement Thursday apologizing for the prolonged price-fixing.
“On behalf of the Weston group of companies, we are sorry for the price-fixing behaviour we discovered and self-reported in 2015,” he said.
“We have the privilege of serving Canadians from coast to coast. That privilege needs to be earned each and every day.
“Reaching a settlement on this matter was the right thing to do in response to previous behaviour that did not meet our values and ethical standards.”
Half the country is going to apply
Strosberg said the courts in Quebec and Ontario overseeing the process to arrange payouts will appoint an independent administrator. When the time comes, people who want to make a claim will have to fill out an electronic form.
“This will also be the largest distribution in a class action in Canadian history,” he said. “I would assume that half the country is going to apply.”
Strosberg said it’s also still unclear how much of the settlement will be collected by the five law firms that have been litigating the case for the last seven years.
The “fee request” has not been determined, but Strosberg said it will not be as high as the roughly 30 per cent of a settlement that is often tied to class action cases.
“The overall consideration is that the fees have to be reasonable,” he said. “The reasonableness of the fee will be determined and specifically blessed by the courts in Ontario and Quebec.”
The law firms have been working on contingency since launching the lawsuits, which followed a Competition Bureau investigation that began in January 2016.
Weston Foods and Loblaw, both subsidiaries of George Weston at the time, had previously admitted their participation in an “industry-wide price-fixing arrangement” and received immunity from prosecution in exchange for co-operating.
At least $1.50 was added to the price of a loaf of bread during the 16-year conspiracy, the bureau alleged in court documents in 2018.
The class-action suits against the seven defendants, filed on behalf of all Canadian residents who bought packaged bread after Nov. 1, 2001, began in 2017.
The lawsuits alleged that an industry-wide price-fixing conspiracy, between 2001 and 2015, led to an artificial increase in bread prices.
In June 2023, Canada Bread was fined $50 million after pleading guilty to four counts of price-fixing bread products under the Competition Act. The Competition Bureau called it the highest price-fixing fine ever imposed by a Canadian court.
In its statement of defence in the Ontario class action, Canada Bread denied participating in a wide-ranging conspiracy to fix the price of bread, and denied profiting from the alleged conspiracy or from the price increases it admitted to.
Metro, Walmart Canada, Giant Tiger, and Sobeys have also all denied being part of the price-fixing conspiracy.
“This is the first instalment,” said Strosberg.
“Weston alleged that they participated in an industry-wide conspiracy with all of those companies. What we’ve done is settle with Weston and Loblaws only.
“Our action continues against everybody else.”
– With files from The Canadian Press