Irene Breckon, a 71-year-old anti-poverty activist, wants more than crumbs from cheater food chains
IRENE BRECKON WANTS US ALL TO GET MORE THAN CRUMBS. She’s ready to go to court to see that we do. So is James Govan.
Breckon, in Ontario and Govan, in Quebec have each taken steps to bring class action lawsuits against six of the largest food chains and bakers in Canada, who have admitted to being in cahoots to gouge us all on the price we pay for bread, for at least 14 years beginning in late 2001.
Loblaw admitted to their part in the price fixing scheme in a public statement on December 19. The company went public, and named others in the scheme, to try and get themselves off the hook by fessing up before formal charges are laid. The Canadian Competition Bureau is conducting a criminal investigation into all the allegations. It has dropped its investigation of Loblaw.
Price fixing is punishable by 14 years in prison, a maximum $25 million fine, or both. Loblaw and George Weston managed to evade those penalties. Other companies found to be involved may not be so lucky.
Breckon is seeking $1 billion in damages on behalf of all Canadian purchasers of bread and other packaged baked goods outside Quebec. The Govan action does not set out any amount. It will only seek to represent people in Quebec.
The companies under investigation include: Loblaws, Sobey’s, Wal Mart, Metro, Giant Tiger and Canada Bread.
Just like taking bread out of our mouths
Irene Breckon is president of the Anti-Poverty Coalition in Elliot Lake, Ontario. She regularly bought loaves of Country Harvest bread at a neighbourhood No Frills grocery store. She says:“Bread is something we all buy all the time. It’s a staple. Not a luxury. Jacking up the price on any food is bad enough. But doing it on bread is pretty much criminal.”
“It is unconscionable for big and wealthy corporations to manipulate the price of bread. I started this lawsuit to make sure this money is returned to consumers.”
Loblaw has offered their customers a $25 gift card as a gesture of goodwill.
But to Shirley Hutchison, shopping at a Toronto area grocery store, it meant little. “I feel cheated that they’ve been charging us more for the bread,” she told the CBC. “We’re getting cheated. It’s not right, it’s not fair.”
Irene Breckon sees the Loblaw gesture as adding insult to injury.
“When I first heard about it, I thought a $25 gift card for 14 years—that’s nothing! I want these corporations to be punished. Our class action will see to it that people receive better reimbursement.”
Irene says she’ll use part of any money she receives to give back to food banks and families in her community.
“I want to see families benefit from this. I definitely want to see that these corporations don’t take advantage again.”
Loblaw said it will pay between $75 and $150 million in damages, depending on how many customers take it up on its gift card offer.
How much did their price fixing cost us?
Maclean’s magazine crunched the numbers for several possible scenarios to come up with a reasonable estimate of how much someone might spend on bread over 14 years before and after price fixing. The findings, while speculative, strongly suggest $25 doesn’t come close to covering us for what we lost.
Maclean’s found that buying one $3.49 loaf of Country Harvest bread every week for 14 years would add $195.52 to the cost—if Loblaw jacked the price up by just 10%
Or close to $400 for a family buying two loaves a week. For small businesses—cafes or restaurants—it’s easy to see how that cost can stretch into the thousands.
According to Maclean’s calculations the price fixing would have to be no more than 1% to work out to $25 over 14 years.
Dave Wingfield is a lawyer working on one of the class action lawsuits. He says a price hike of 1% is highly unlikely. “It’s a lot of work, and risk, to involve yourself in conspiracy over 14 years. To do that for a nickel per loaf of bread just wouldn’t be worth it.”
Price gouging on bread won’t come as a surprise to anyone who has bought bread regularly in recent years. Statistics Canada’s data seems to show the price fixing in action.
Throughout the 1990s prices for bread moved in tandem with other food prices and the overall consumer price index. Then just after the price-fixing scheme began, bread prices started to climb dramatically.
The competition bureau has yet to name any other companies involved beside Loblaw and Weston. However, the Loblaw apology and public admission of organized price fixing angered its major grocery rivals Sobeys and Metro. Both Metro and Sobeys have denied any wrongdoing.
Sobeys CEO Michael Medline said the Loblaw reference to an “industry-wide” scheme mislead the Canadian public and threw many other retailers under the bus, while minimizing its own actions and securing an immunity deal.
Read the fine print
Montreal lawyer Joey Zukran says consumers should think twice before accepting the $25 gift cards offered by Loblaw. Zukran is working on one of the efforts to launch a class-action lawsuit against the companies under investigation in the bread price-fixing scheme.
“Just be careful, read the fine print, and make sure you’re not giving away any rights to take part in the class action in exchange for what is basically a coupon to a grocery store,” says Zukran.
“We sincerely believe that you’re entitled to a lot more money than a $25 gift card as a result of collusion going on for 14 years,” he said.
“And just make sure that you’re not waiving any rights or giving away any rights by signing up for what appears to be something worthwhile at first glance,” Zukran added.
Zukran says Canadians should also consider that they will be sharing information like email addresses when they sign up for the cards and that the money must be spent in Loblaw stores, meaning Loblaw could profit.
Canadians will be able to register online for the $25 cards starting January 8. Loblaw is already collecting email addresses that it says will be used to notify people when registration begins.
“We will only use your email address to notify you that registration has opened and not for Loblaw customer marketing or any other purpose, unless you have already given us your consent to do so,” the Loblaw Card Program website states.
Trusting a company that has already admitted to cheating them for 14 years may be too big an ask for most Canadians. Waiting for a better deal from Loblaw as they manoeuvre to avoid, or settle, a class action seems like a much safer bet.