UPPER CRUST PAD PROFITS

Public outrage should be baked into ongoing bread price saga

If the bread price fixing scandal doesn’t have you outraged, it really should. According to the Competition Bureau, some of the biggest companies, owned by Canada’s wealthiest families at the time, were literally nickel and diming you on the price of basic food products to pad their bottom lines.

And what’s worse, they may have been fixing the price of meat as well, according to court documents.

Canada Bread, the largest bakery firm in the country, admitted to fixing the price of bread, pleaded guilty to four counts under the Competition Act and agreed to pay a $50 million fine during proceedings last Wednesday in a Toronto court. George Weston, which was Canada’s second largest bakery unit, already admitted along with Loblaw to their part in the price fixing scheme and co=operated with the Competition Bureau in exchange for immunity.

The idea that price fixing in Canada’s bakery and grocery industry might have been taking place should not be up for debate any longer.

What isn’t up for debate is that Canada Bread and Weston were owned by two of Canada’s richest families when, according to the Competition Bureau, this price fixing took place. The McCain family of Toronto owned Maple Leaf Foods, which owned Canada Bread at the time, and the Weston family, famously represented by Galen Weston Jr. in those ads for Loblaws, owned not only Loblaws, but Weston Foods, their bakery division.

According to the court approved statement of facts, Canada Bread coordinated price increases with their suppliers and their competitors at Weston between 2007 and 2011. According to the statement of facts, they agreed to what ended up being coordinated price increases, accepted by major retailers, of 12 to 14 cents per loaf.

It has been estimated that over the time that the Competition Bureau said that the price fixing scheme was in play, it cost the average Canadian family $400.00

If the admissions in the guilty plea are true, then you have to ask: For what? To pad the profits of highly successful companies and bank accounts of the rich families that owned them?

When all of this started in 2007, Michael McCain was CEO of McCain Foods, which owned Canada Bread at the time, and Galen Weston Jr. was executive chairman at Loblaws. Both recently retired from their respective positions just before this court settlement was approved.

If they hadn’t retired, the news this week would have seen demands that they be pushed out for leading companies at a time when the Competition Bureau said such behaviour was taking place.

Because Loblaws and  the other Weston companies received immunity from prosecution, we can’t see the extent to which Galen Weston Jr.  may have been involved. As for McCain, his company, Maple Leaf, was not involved in the guilty plea and Canada Bread’s admission of guilt were made by its new owners, not Maple Leaf Foods. Maple Leaf Foods has said it was “completely unknown” why Canada Bread entered into the plea agreement and has denied any wrong doing.

“We are not aware of any wrongdoing by Canada Bread or its senior leadership during the time that we were a shareholder,” Maple Leaf said in a statement. “We are not aware of and have never engaged in appropriate or anti-competitive activity, and we will defend ourselves vigorously against any allegations to the contrary.”

Yet, according to allegations in a search warrant, a March 2007 email sent from the account of Michael McCain’s executive assistant  and signed “Michael” detailed a meeting McCain had with a then-executive with grocery chain Metro. The men discussed how to “manage category profit up,” according to the email submitted to a court in May 2019 to obtain a search warrant.