Canadian consumers affected by a years-long bread price-fixing scheme will have to wait at least a few months before being able to apply for a payout under a new $500-million class-action settlement.
The country’s largest grocer, Loblaw Cos. Ltd. L-T and its parent company, George Weston Ltd. WN-T, announced their agreement Thursday to pay one of the largest settlements in Canadian history, to resolve class-action lawsuits over their role in the scheme.
Ninety-six-million dollars of the settlement has already been paid out in the form of $25 gift cards to its own grocery stores that Loblaw distributed in 2018. The plan for disbursing the remaining $404-million is yet to be finalized, and is part of an agreement that will be put forward by the end of October, according to lawyers involved with the case.
Loblaw, parent company George Weston agree to pay $500-million to settle bread price-fixing lawsuits
A class-action settlement process typically begins with a public notice, which in this case will alert people who bought bread from the companies that they are entitled to participate. That means anyone who bought packaged bread from Loblaw-owned stores – including Loblaws, No Frills, Real Canadian Superstore and other banners – or that was manufactured by former George Weston subsidiaries Weston Foods and Weston Bakeries, any time between 2001 to 2015.
“There’s millions of them. Everybody who bought bread,” said Jim Orr, a partner at Orr Taylor LLP and one of the lawyers for the plaintiffs in the class action.
“The money is going to be spread across a large number of people, when we get into the settlement details that we’re going to work on. We’ll get a better picture, through certain programs that Loblaws has, about their customer base.”
Once the plan receives court approval, consumers will have the option to contact an administrator of the settlement funds to make a claim. Because very few people will have receipts dating back to 2015 or earlier, people will not have to have that kind of proof that they bought bread during that time in order to be eligible, Mr. Orr said. They may have to sign a document saying that they made such a purchase.
One important detail of the agreement is that people who accepted a $25 gift card from Loblaw in 2018 have not waived their eligibility to receive funds under the new settlement.
If any money remains at the end of the disbursement process, it will not go back to Loblaw or George Weston, but will be donated to charities such as food banks, he said. The details of the charities will be settled as part of the agreement.
“Canadians should view this as a win. It’s a huge win,” said Jay Strosberg, a managing partner at Strosberg Wingfield Sasso LLP who is also representing plaintiffs in the class action. “This is, by any scale, a massive settlement.”
The lawsuits stemmed from a public admission by Loblaw and George Weston in 2017 that they had participated in price-fixing. While that was the first the public heard of the alleged “industry-wide” conspiracy, the two companies had reported it to the federal Competition Bureau in 2015. The federal watchdog subsequently launched an investigation, which is continuing.
Last year, one of Canada’s largest bread producers, Canada Bread, pleaded guilty to involvement in the scheme and agreed to pay a $50-million fine to settle its part of the bureau’s investigation. However, none of that money goes directly to consumers who were affected by price-fixing. Canada Bread is also named as a defendant in the class action.
“This is the mechanism to get back some of this money and give it back to consumers,” Mr. Strosberg said.
There are currently two class-action lawsuits in the matter, in Ontario and Quebec. Both were covered by the settlement agreement, which also applies to consumers outside of those provinces.
The lawsuits are continuing against other defendants, which include Metro Inc., Sobeys Inc., Walmart Canada and Giant Tiger Stores Ltd. Those retailers have denied participating in the alleged scheme.