Today customers can begin registering to receive Loblaw Companies’ $25 gift cards, the grocer’s apology for its role in a bread price-fixing scheme cooked up alongside several other companies. The gift cards can be used to buy items sold in their grocery stores across Canada. Loblaw has said it expects as many as six million Canadians will receive the gift card and it will cost the company up to $150 million in total payout.
To register for the gift card you need to be at least 18 year old and have purchased certain bread products. No documentation is required as part of the registration and Loblaws indicates it has the right to limit the number of gift cards made available. Full details and the registration entry form are available at a website made public today.
When the announcement was made in December 2017, Canadians were able to sign up to receive email notice once registration opened. But even if you didn’t already sign up for the email, you can still claim your $25 gift card as long as you complete your registration by May 8, 2018.
Most Canadians were surprised when Loblaw Co. and its parent company George Weston Ltd. confirmed last month that they were behind a tip-off to the Competition Bureau about an alleged industry-wide bread price-fixing scheme that lasted from 2001 to 2015. For 14 years, Loblaw Co., Weston’s bakery division along with other grocery retailers coordinated bread price increases.
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.”
Other groups across Canada agree and class action suits have been launched by senior citizen and anti-poverty activists, as well as other groups in Quebec, Ontario and Manitoba, including a recent one by Derek Nepinak, a former grand chief of the Assembly of Manitoba Chiefs. Nepinak is the lead plaintiff in a $1 billion class-action lawsuit on behalf of all Canadians who purchased bread from the named grocers since January 2001. The case is one of many cropping up against multiple Canadian grocers, including Loblaw Companies Ltd., its parent company George Weston Ltd., baking giant Canada Bread Co., as well as Walmart Canada, Metro, and Giant Tiger Stores Ltd. He is being represented by Winnipeg-based law firm Boudreau Law but there are others in motion by Strosberg Sasso Sutts LLP and Merchant Law.
There have been rumblings that Canadians shouldn’t take the $25 gift card because it could disqualify them from participating in the class action suits, which hold out the possibility of a much, much bigger payoff than the gift cards. However, lawyers as well as company spokespeople say you can claim the gift card without fear of being barred from future legal settlements. In fact, Loblaw itself noted that the $25 gift card should not be looked at as the only estimate of legal damages.
Lawyer Anthony Merchant of Merchant Law, whose firm is also working on a class action suit against Loblaw, recommends that Canadians register for both the gift card and class action lawsuit. “Take the $25 and sign on to our class action suit as well,” says Merchant. “The gift card is $25 in your hand. I don’t foresee Loblaw putting any requirements on claiming it and Canadians should be able to claim the gift card as well as have a share of any future class action suit settlement if they join.”
It’s likely that the class action lawsuits (as well as any other lawsuits) against Loblaw and other grocers involved in this price-fixing scheme will take months, if not years, to wind their way through the courts and fairly substantial monetary settlements and penalties are likely to be awarded.
“The punishment has to be sufficiently severe to make up for this conduct because on many other occasions they’re likely getting away with it,” says Merchant.
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