A group of the country's largest retailers and bread makers has been successful in delaying a class-action lawsuit that alleges they overcharged consumers by an estimated $5-billion over 15 years by artificially raising bread prices.
Justice Edward Morgan of Ontario Superior Court ruled on Friday that the companies had good reason to ask for a postponement in the class-action proceedings until a higher court had ruled on some issues that could affect the class-action case.
“The benefit of economizing of resources and proceedings in this way will likely outweigh any delay engendered by a pause at this stage,” Judge Morgan said. “In my assessment, the Supreme Court of Canada’s pending judgment … is worth the wait.”
Two consumers are seeking certification to launch the class-action on behalf of Canadian shoppers. They had argued the matter should not be postponed because the delay could result in the case taking another year before it goes forward in the alleged industry-wide bread-price-fixing conspiracy.
The price-fixing scandal surfaced about a year ago after grocer Loblaw Cos. Ltd. and its parent George Weston Ltd., which owns bread maker Weston Foods, disclosed they had struck a deal with the federal Competition Bureau to avoid criminal charges for their role in the alleged conspiracy to fix bread prices between 2001 and 2015.
Marcy David and Brenda Brooks, who are trying to launch the class-action lawsuit, had argued that the bread-price-fixing case is notorious, affecting almost every family in Canada. “The public understandably expects an expeditious proceeding," they said in court documents.
Loblaw and Weston revealed in late 2017 they were involved in what they called an industry-wide scheme to artificially boost prices of packaged breads, buns, bagels, rolls, naan, English muffins, wraps, pitas and tortillas. Loblaw and Weston said the scheme included other retailers and another bread maker; Canada Bread Co., is also a target of the class-action lawsuit, along with grocers Sobeys Inc., Metro Inc. and discounters Walmart Inc. and Giant Tiger Stores Ltd. Also being sued is Maple Leaf Foods Inc., which owned Canada Bread during much of the alleged conspiracy, and Mexico’s Grupo Bimbo, which bought Canada Bread in 2014.
Aside from Loblaw and Weston, the accused companies have said they have no knowledge of their part in the price fixing or declined to comment.
The judge agreed with the accused companies’ arguments that that the class-action should be put on “pause" until the Supreme Court of Canada rules on another case involving alleged price-fixing of optical disc drives.
The issues include whether “umbrella purchasers" – consumers who bought bread from companies other than those accused – should be part of the class-action based on the assumption that price hikes would have rippled through the industry. Another issue is whether the methodology used in estimating losses suffered is credible.
An economist working for the complainants has estimated the damages could be more than $5-billion. But Loblaw spokesman Kevin Groh has said the estimate is “an oversimplification and overstates any potential damages. The courts will determine the appropriate figure over the coming years."