At least $1.50 has been artificially baked into the price of a loaf of bread during a 16-year-long bread price-fixing conspiracy involving the country’s largest bakery wholesalers and grocery retailers, the federal competition watchdog alleges in court documents released Wednesday.
The Competition Bureau alleges that Canada Bread Company Ltd. and George Weston Ltd.’s senior officers communicated directly to raise prices at least 15 times, with an average increase of 10 cents per loaf passed on to consumers, between about 2001 and 2016.
According to previously-sealed information to obtain documents, the pattern became colloquially known as the 7/10 convention — with an average seven cent price increase at wholesale and 10 cent price bump for the consumer in stores, resulting in an average margin increase of three cents per loaf for retailers.
The conversations around raising prices on baked goods including bread, buns, bagels, naan, English muffins and tortillas started months before the increase would hit the shelves, according to the documents.
After agreeing on a price increase, the suppliers allegedly met individually with their retail clients — including Loblaw Companies Ltd., Walmart Canada Corp., Sobeys Inc., Metro Inc. and Giant Tiger Stores Ltd. — to get their approval for the price hike. The retailers agreed to the boost on the condition their competitors would follow suit and demanded that the suppliers actively manage the process to ensure all retailers were co-operating, the documents said. (more...)
At least 7 companies committed indictable offences in bread-price fixing scandal: Competition Bureau
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