'It's not really enough': Loblaw bread price-fixing settlement doesn't cut it: expert

Dalhousie University Agri-Foods Analytics Lab Director Sylvain Charlebois discusses Loblaws' price-fixing settlement with Alberta Primetime host Michael Higgins.

This interview has been edited for length and clarity. 

Michael Higgins: Loblaw and its parent company have agreed to pay $500 million to settle a pair of class action lawsuits. The suit, brought against a group of companies that include Canada's biggest grocers, alleging they participated in a decade-old industry-wide bread price fixing scheme. Loblaw chair Galen Weston apologized on behalf of the company saying this behavior should never have happened.

This is said to be the largest antitrust settlement in Canadian history so in terms of being a hit to the pocketbook for Loblaw, how close does it come to settling this affair?

Sylvain Charlebois: Not close enough, to be honest. When you look at the costs, this bread price fixing scheme was going on allegedly for 14 years, from 2001 to 2015, and so Canadians actually overpaid for bread, buy as much as $5 billion. So $500 million is just 10 per cent of that sum. And so some people will say it's a good start, it's a step in the right direction, but it's not really enough. And of course in the U.S. when you see some price fixing scandals, executives tend to go to jail. We didn't see anybody being accused criminally in Canada. In fact, actually, we gave immunity to some of them, including Galen Weston. So you do wonder whether we actually take collusion, or criminal acts, very seriously in Canada.

MH: How do you see this settlement trickling down to consumers? What should Canadians expect?

SC: So far, we have received a gift certificate. If you remember, Gavin Weston himself did apologize back in 2017. At the time he actually did announce that he was giving $25 to all Canadians, you had to register online. So about 3,000,800 Canadians did register and so that amounts to about $96 million. And so there's probably another $400 million left of the 500 million and I suspect that the courts will decide to either force Loblaws to issue more gift cards, or they may actually use other means I'm not entirely sure at this point.

MH: Where the company is concerned, to what degree does this put the issue behind them? How far will it go to earning trust back from consumers?

SC: I think the biggest problem is the Competition Bureau. When Loblaws disclosed to the bureau that it was actually part of this scheme, it was back in 2015. That's when the investigation started. That was nine years ago and it's still ongoing. A lot of people think it's over, it's still ongoing. So we have now three companies, which have admitted guilt: Loblaws, Weston Bakeries, and of course Canada Bread, which last year actually paid a hefty fine $50 million. There's still four companies under investigation – Walmart Canada, Sobeys, Metro and Giant Tiger – and all of them have actually denied their involvement. So if they weren't involved, we need to know, if they were involved, we need to know as well. Of course, when you look at the sum that we heard about, $500 million, it's just not enough. And my guess is that Canadians will be expecting more or at least more accountability moving forward.

MH: So what kind of weight does that then put on the shoulders of the Competition Bureau to get this done?

SC: I'm hoping that Minister (Francois-Phillipe) Champagne will actually put more pressure on the bureau to finish the job. I don't think it's acceptable for any investigation to last nine years. In the U.S. to prosecute price fixers, like in the canned tuna case which happened a few years ago, an investigation lasted for about a year and some executives went to jail for 40 months, some of them just got out actually, and a fine. And so right now I think that Canadians, to feel protected, truly protected, they need a really highly functioning bureau. Right now courts are doing their job, they're getting money for Canadians, but we also need the bureau to do its job.

MH: Does that mean a change in legislation? What would pave the way for justice to be served to that degree, where maybe an executive is sent to jail?

SC: We’ve actually worked with the bureau on three occasions, on three files, and the bureau actually has a lot of power, it's just not using it. In fact with the new law which was implemented, I believe before the holidays on December 15, 2023, the bureau actually has the right to go after data and evidence if they suspect that something is wrong. So they should be able to use some of that authority and power. So they should. I mean, why wait? We have been waiting for nine years and that's why there’s cynicism out there. Canadians criticizing the industry is totally warranted. It's not surprising to see that.