Canada Bread accuses Maple Leaf Foods of using it as a “shield” to avoid liability in the alleged bread price-fixing scheme that is the subject of two class actions and an ongoing Competition Bureau investigation.
In documents filed with an Ontario court in one of the class actions, Canada Bread alleges Maple Leaf broke the law and breached its management agreements.
Maple Leaf was the majority shareholder of Canada Bread until Grupo Bimbo purchased the company in 2014.
Canada Bread is the only company so far to have been fined $50 million by the Competition Bureau in connection with the alleged scheme, in 2023. It pleaded guilty to four counts of price-fixing bakery products under the Competition Act.
Canada Bread admitted that it entered into an agreement with Weston Foods, then a subsidiary of George Weston, to raise prices on a variety of packaged bakery products, resulting in two price increases.
Canada Bread has previously denied participating in a “long-running and far-reaching conspiracy” to fix the price of bread, and has instead said any anti-competitive conduct it engaged in was at the direction of and for the benefit of Maple Leaf.
At the time, Maple Leaf said allegations of improper pricing practices at Canada Bread while it was under Maple Leaf’s control were “completely unfounded.”
Now, Canada Bread alleges that Maple Leaf is liable for all damages it has suffered or will suffer as a result of the Competition Bureau’s investigation and legal proceedings.
Maple Leaf did not immediately respond to a request for comment.
In its amended statement of defence and counterclaim filed Thursday, Canada Bread said Maple Leaf selected and appointed Canada Bread’s board of directors, installed one of its senior executives to run the company and agreed to provide legal and compliance services.
Therefore, Canada Bread argued that Maple Leaf knew or should have known that there had been anti-competitive conduct, making it “indirectly and contractually liable.”
In June 2023, Maple Leaf told The Canadian Press that it was not aware of any wrongdoing by Canada Bread or its senior executives during its time as a shareholder.
“We have acted ethically and legally at all times. We are not aware of or have ever participated in any improper or anti-competitive activities, and we will vigorously defend ourselves against any allegations to the contrary,” Maple Leaf said at the time.
In July, Loblaw and George Weston said they had agreed to pay $500 million to settle two class actions – in Ontario and Quebec – over the alleged bread price-fixing scheme.
The Ontario class action is brought on behalf of all Canadian residents who purchased bread after March 1, 2018.er November 2001, except for residents of Quebec. The lawsuit was brought against a group of companies including Loblaw and George Weston, Metro, Walmart Canada, Giant Tiger and Sobeys and its owner Empire.
Metro has denied any involvement in bread price-fixing, accusing Loblaw and George Weston of conspiring to spread the blame across the industry, which Loblaw has denied.
Sobeys and Giant Tiger have also said they were falsely implicated. Walmart Canada has also denied participating in the alleged conspiracy.
The Competition Bureau began investigating alleged bread price-fixing in 2016 after Weston Foods and Loblaw, subsidiaries of George Weston at the time, admitted to participating in an “industry-wide price-fixing conspiracy” and received immunity from prosecution in exchange for their cooperation.