This chart shows how bread prices soared during the price-fixing scheme - Macleans.ca
 

This chart shows how bread prices soared during the price-fixing scheme

Consumers were outraged to learn about the price fixing, but no one who shopped for bread in recent years was surprised to hear prices were pushed up


 

Earlier this week Loblaw Companies Ltd., Canada’s largest grocery chain, admitted it took part in an industry-wide scheme to jack up the price of bread. The collusion, according to Loblaw, had gone on for more than 14 years.

READ: Here’s how to get $25 from Loblaws after it admitted to fixing bread prices

Consumers have expressed outrage at the revelation, though anyone who has shopped for bread in recent years certainly wouldn’t be surprised to hear prices were pushed up. A glance at Statistics Canada’s data on food prices and the consumer price index, which compares the cost of a fixed set of goods and services over time, seems to show the price fixing in action. Throughout the 1990s prices for bread moved in tandem with other food prices and the overall consumer price index. Then just after the price-fixing scheme began, bread prices started to climb dramatically.

While the StatsCan data can’t put a dollar amount on the increase in bread prices, it can offer insight into how much bread prices changed compared to other foods bought at Canadian grocers over that time period.

While several other grocery stores are under investigation, Loblaws, along with its parent company George Weston Ltd, will receive immunity from criminal charges for tipping off the Competition Bureau and co-operating with its investigation.

Starting in January, Loblaws will offer customers who bought bread before March 2015, a $25 gift card as a goodwill gesture.

READ: Loblaw could owe you much more than $25


 

This chart shows how bread prices soared during the price-fixing scheme

  1. Yes, we’re aware price fixing is illegal. However, by pursuing this case, the feds diverted sparse resources away from other more pressing matters. This was a classic case of wasting a lot of time and money so that someone could give show the taxpayers what wonderful things the government does for them.
    Those same resources could have been used to recover the hundreds of millions of taxpayer dollars that were illegally taken from us via the collusion between organized crime, construction companies, and various actors in Quebec municipal politics.
    Those same resources could have been used to begin to track down the monies owed the public treasury that have been unlawfully hid from the tax authorities via offshore banking,
    If we’re going to try and justify this mis-allocation of resources by dragging out the CPI, then let’s have an honest appraisal of public sector wages and benefits against that same metric in the same time period. How much has the public payroll grown against private sector employment and income over the same time period? Because the public sector is largely unionized, and the taxpaying private sector employees are restricted by law from using market forces against inflationary government wage and price increases, a more pernicious form of price fixing is used against the public for which they have only tremulous and intangible courses of action.
    I appreciate that the government does have a responsibility to protect the public from unlawful commercial practices, but don’t ask me to give a great big cheer about this kind of penny-ante crap when the government wastes and misuses more of my money in a week than the grocery giants took from me in almost two decades.
    The parts of the federal government that don’t deserve to be drowned in Lake Superior, pretty much just need to fall through the ice on the Rideau Canal.

  2. This is what can happen when a very large retailer such as Loblaws is under the
    same ownership with one of its product suppliers/manufacturers, Weston Bakeries,
    which sells bread products under various brands.

    Prices can be fixed along a wide range of Weston bread brands and in-store baked
    breads, and limit as much as possible store selection of other competitor brands.

    When there are other manufacturers they have an incentive just to keep their prices
    competitive or priced just under those of Weston Bakery products.

    This is like Kelloggs selling many cereal name products, giving the consumer the
    impression that there is a wide selection of products based on price/quality competition.

    • George,
      I think you missed something here. Loblaw found a rotten apple in their barrel who was involved in and, as far as I know, may even have led this price fixing. But when Senior Management at Loblaw became aware, they immediately reported it to The Competition Bureau. As such they actually put a stop to this and received immunity from any prosecution because of their actions. Now the rest of the food industry is saying “not us, we weren’t involved” but obviously the bad guy at Loblaw was colluding with others and I’m sure as part of the immunity deal, the guy at Loblaw has provided names. This will be interesting to watch as the different companies involved get exposed.