Money Loblaws’ price-fixing on bread may have cost you at least $400

19:23  12 january  2018
19:23  12 january  2018 Source:   canadianbusiness.com

Former Manitoba grand chief files $1B class-action suit over bread price-fixing

  Former Manitoba grand chief files $1B class-action suit over bread price-fixing Derek Nepinak, the former grand chief of the Assembly of Manitoba Chiefs, has filed a $1 billion class-action lawsuit against multiple Canadian grocers after Loblaw Companies revealed it participated in industry-wide bread price-fixing for 14 years. define("homepageFinanceIndices", ["c.deferred"], function () { var quotesInArticleFormCode = "PRMQAP"; var config = {}; config.indexdetailsurl = "/en-ca/money/indexdetails"; config.stockdetailsurl = "/en-ca/money/stockdetails"; config.funddetailsurl = "/en-ca/money/funddetails"; config.etfdetailsurl = "/en-ca/money/etfdetails"; config.

Any way you slice it, Canadian bread shouldn’t have cost this much.

The Competition Bureau of Canada alleged, in court documents released 31 January 2018, that seven Canadian bread companies committed indictable offences in what Michael Enright later termed "the great Canadian bread price - fixing scandal" of 2018.

$50 bills sticking out of a toaster: (iStock; Shutterstock)© Used with permission of / © Rogers Media Inc. 2018. (iStock; Shutterstock)

As word emerged about the Loblaws chain and bread-maker George Weston Ltd. confessing their role in a massive price-fixing scheme, analysts often referred to bread as a supermarket loss leader. Think of this like your favourite pub’s wing night: they lower prices to a level below what it costs to make and serve them, in hopes of getting patrons in the door and guzzling beer. Wonder Bread or Dempster’s Whole Wheat, the argument goes, would similarly be offered at cut-rate prices to bring in shoppers who will generate money for grocers in other aisles.

Is price fixing a major problem in Canada?

  Is price fixing a major problem in Canada? Opinion: Despite the righteous outrage over an admitted scheme to fix the price of bread, the reality is that Canada’s system largely worksEditor’s note: The opinions in this article are the author’s, as published by our content partner, and do not represent the views of MSN or Microsoft.

At least seven companies, including Loblaws , Giant Tiger , Sobeys , Walmart Canada , and Metro were part of the bread price fixing scandal and Here’s how 14 years of bread price fixing could have easily cost families an extra $ 400 , and the many statistical ways the prices looked fishy http

Loblaw ’s attempt to smooth over a bread price - fixing scandal with a gift card appears to be paying off — at So she figures the price - fixing scandal cost her much more than the she got back. Loblaw said, at this time, it doesn't plan to cap the number of people who can receive a card.

Quotes in the article

George Weston Ltd


You can sign up for the $25 Loblaw gift card starting today. Here’s how.

  You can sign up for the $25 Loblaw gift card starting today. Here’s how. Some estimate Loblaw pocketed a whopping $1 billion in extra profit made on bread bought by all Canadians at the grocery chain over the 14 years. “We don’t believe $25 is much in the way of compensation,” says Bruce Cran, president of the Consumer’s Association of Canada (CAC), based in Vancouver. “A gift card for a few loaves of bread is not enough accountability for the length of time this scheme went on.

The competition bureau's investigation into alleged bread price - fixing involves at least seven companies. George Weston Ltd. and Loblaw At least one class action lawsuit has already been filed, naming as defendants George Weston Limited, Loblaw Companies Ltd., Weston Foods

One or more deals will expire before your pick-up date. Updated prices are reflected in your cart.

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It’s hard for analysts to say definitively that bagged bread is a loss leader; there’s plenty that isn’t clear about the economics in Canadian grocery stores, as evidenced by the Competition Bureau’s ongoing price-fixing investigation of multiple chains and suppliers, on top of the fact the scheme Loblaws and its sister manufacturing company admitted went undetected from mid-2001 until March 2015.

Moreover, many of the price figures we can see suggest bread is the opposite of a loss leader. Rather, there are many signals and comparisons that suggest bread became a much more lucrative product for supermarkets over the 14 years in question.

As Maclean’s noted last month, from 2001 to 2015 the consumer price index for bread rose dramatically more than did the average for all food prices. In addition to tracking bread for the key inflation measure, Statistics Canada also reports the monthly average price for a loaf of bread. The loaf that cost you $1.42 in July 2001, was a $3.04 in March 2015—more than double the (ahem) dough.

Judge rules Loblaw gift card terms not misleading

  Judge rules Loblaw gift card terms not misleading TORONTO - An Ontario judge has ruled that it's too early to determine the enforceability of Loblaw Companies Ltd.'s policy that consumers who receive a $25 gift card from the company waive their right to that sum in possible future settlement money from a bread price-fixing scheme class-action lawsuit. Ontario Superior Court of Justice Edward M. Morgan dismissed a motion challenging the terms of Loblaw's gift card plan. The company announced Monday L

Loblaw is offering eligible customers who register online before May a gift card that can be used at its grocery stores across Canada. In a letter to customers, Save-On-Foods said it had no involvement in the price - fixing scheme but is offering a rebate to members of its customer loyalty program

George Weston and Loblaw said Tuesday they became aware of an arrangement involving the co-ordination of retail and wholesale prices of some George Weston Ltd. and Loblaw Companies Ltd. revealed Tuesday that both the bakery owner and grocer participated in an industry-wide bread

Kevin Grier, a food market analyst based in Ontario, measured what bread should have cost if it rose in tandem with overall food price inflation. By 2015, there’s a $1 gap between the real price and Grier’s price. If a family buys one bagged bread per week for a year, that’s a $52 difference—a lot when compared to the $25 gift cards Loblaws has offered as their mea-culpa for 14 years of fixing prices. The average price gap from 2002 to 2014 was 55 cents, Grier says—or that one loaf per week over that period may have plumped up a grocery bill by $371.80.

a screenshot of a social media post© Used with permission of / © Rogers Media Inc. 2018.

The appearance of inordinate price increases does not necessarily mean there was price fixing, Grier notes. “It raises your attention, that if they did do it, you can see it,” he says. “But it doesn’t prove that they did anything.”

READ: Where to donate your $25 Loblaws gift card: find your nearest food bank here

And perhaps it’s unfair to assume the bread cost should have lined up neatly with the cost of other groceries. That would discount the fluctuations in grain prices over the years, particularly with last decade’s spike in crop use as biofuel. Let’s consider the price of milled flour, using the industrial price index, and see how that compared with bread in the consumer price index.

Loblaw says it doesn’t plan to cap number of gift cards

  Loblaw says it doesn’t plan to cap number of gift cards Grocer clarifies policies around make-good after price-fixing scandalL

READ: Loblaws ’ price - fixing may have cost you at least $ 400 . (Not live): Recommended reading and updates on our various collections of the Maclean's Archives; everything Maclean's has ever published—more than 3, 400 issues and 100,000 articles.

Oh my.

a close up of a map© Used with permission of / © Rogers Media Inc. 2018.

It’s equally jarring when you consider how prices for loaves in the U.S. have risen over time. According to the Bureau of Labor Statistics, American consumers saw bread prices rise half as fast as happened in Canada during the time of Loblaws’ misconduct.

a close up of a map© Used with permission of / © Rogers Media Inc. 2018.

Outside of Canadian supply-managed foods like dairy and eggs, Canada and U.S. foods generally follow the same price trajectory. Here’s bacon:

a close up of a map© Used with permission of / © Rogers Media Inc. 2018.

And here’s retail flour:

a screenshot of a map© Used with permission of / © Rogers Media Inc. 2018.

Lastly, in a note to subscribers of his market reports, Grier also looked at the price spread between bread and its most friendly spread: butter. “In 2002 a loaf of bread was valued at 45 per cent of a pound of butter,” he writes. “By 2015 bread was worth 64 per cent of a pound of butter.”

a screenshot of a cell phone© Used with permission of / © Rogers Media Inc. 2018.

It could take years before the Competition Bureau reveals what really took place between Loblaws, Sobeys, other chains and their packaged bread suppliers. On the bright side, bread prices have stopped rising, and settled to around the same prices they were in 2011. But the past increases do seem to leave a trail of breadcrumbs for the suspicious.

Bakery to offer free bread in exchange for bread price-fixing $25 gift cards .
A local bakery in Kamloops, B.C., is offering customers five loaves of bread in exchange for their $25 gift cards to Save-On-Foods and Loblaws grocery stores, which they will then donate to local charities.AMZN

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