Canada Bread agrees to $50M fine for role in bread price-fixing scandal
Canada Bread has agreed to pay at least $50 million for its role in fixing the price of bread for years, according to documents filed in an Ontario court.
Fantastic! Loblaws and every other responsible party next, please!
[Edit]
The bureau subsequently executed search warrants against numerous companies, including Weston, Loblaw, Metro Inc., Sobeys Inc., Walmart Canada, Giant Tiger Stores Ltd., Overwaitea Food Group and Canada Bread.
An incomplete list of said responsible parties.
For real. This "our profit margin hasn't increased" argument is BS. If it's a percentage, it's increased at the rate of YOUR inflation. That's why you can simultaneously make the profit margin argument, while toting record profits at investor's meetings.
If I sell lettuce at $1 and make $0.10 profit, I have a 10% profit margin. Mark every step of the way up to my store and sell the same lettuce for $10 and make $1 profit, I STILL have a 10% profit margin. But now I can also tell my investors I have increased profits 900%
I'm sure there's lots of arms length vertical integration to spread these higher costs around to as well. Example: Rogers stores, service techs, etc are all "technically" subcontractors. Numbered companies with Rogers logos on everything.
I'd be pretty damn surprised if Loblaws et al don't have their hands in the logistics ends of their businesses. ___
They're so vertically integrated that they charge themselves several times along the chain, and apply as many hidden markups as they want. IIRC, eg, they own the property the stores are on, but they hold the real estate under a separate company so they can charge themselves rent. They own or are major investors in the transport and logistics.
"As of this Friday, actually, there will no longer be a maximum fine per offence, which will make the legal and financial risks to companies much more significant going forward," he said.
This is honestly the biggest and best news in this article. Writing concrete numbers into a law is dumb. Especially in white collar crimes. It just feels like an invitation. Like: if you can make more than this, go ahead and do it.
And even for non white collar crimes. Any offence laden with only a fixed monetary fine basically doesn't apply to rich people. Why would a billionaire care for a 5£ parking ticket? That's what so great in Switzerland, they do fines as a portion of wealth.
$50M is pocket change to them. Needs more zeroes at the end.
We need some better competition in Canada.
How hard is it to price your bread independent of your competitors? Jesus.
They need to go to jail. A fine is nothing to these huge companies.
What I'd like to know is:
How much additional profit and/or revenue did Canada Bread take in due to the behavior that resulted in this fine?
I've read a few articles looking for this information but haven't found this info. Does anyone have any insight?
Exactly. If they made more than $50 million in profit from the price fixing, the fine is just another cost of doing business, with no incentive to stop the practice.
Nice. In what seemed like reponse to getting caught years back Real Canadian Superstore in our area at least changed from an amazing in store bread recipe to some cheap ass crap. The regular loaves, french bread, italian, and buns are now this airy flavourless recipe in all the instore backed stuff. Maybe to keep the same profit after bread prices changed?? if it is only regional then some manager made a terrible decision.
the sobeys in my area has some decent in-house bread. i can't get a decent loaf of third-party bread off the shelves anymore - it's all wonderbread etc. was really loving dave's killer bread but it's been seemingly replaced by extremely mediocre bread with similar marketing, as if i'm buying the packaging.
not a lot of respect for consumers on display
Yep, we actually stopped shopping for our full grocery shop there; since bread was a staple. they lured us back with a package change claiming it was a new recipe. it was the same garbage recipe just in a new bag. The bakery I like is too far for normal shopping. i have been baking my own instead, as you said all the store bread now is this wonderbread style garbage.
So because I'm not entirely sure how this all works, maybe someone can inform/correct me.
So a bunch of companies were working together to increase/overvalue the price of bread?
Isn't that exactly what gas stations/companies have been doing for years now? There is a reason you don't see gas station wars anymore, if individual stations don't price their gas at what the company decides it's worth they get slapped. How is that not price fixing?