Bakers, grocers met to reach deals on bread prices, competition watchdog alleges
Senior officers at Canada’s two largest bread wholesalers communicated directly to raise prices in lockstep, then met with five retailers, who accepted the hike on condition their competitors would as well, the federal competition watchdog alleges in court documents released Wednesday.
The Competition Bureau believes wholesalers Canada Bread Company Ltd. and George Weston Ltd., as well as grocers Loblaw Companies Ltd., Walmart Canada Corp., Sobeys Inc., Metro Inc. and Giant Tiger Stores Ltd. committed indictable offences under the Competition Act, according to the previously sealed information to obtain documents.
Canada Bread and George Weston’s senior officers agreed to boost bread prices in tandem, typically by seven cents, for more than a decade starting in 2001, the documents allege.
The suppliers then allegedly met individually with their retail customers to get their approval for the price hike.
The retailers agreed to the boost on the condition their competitors would as well to maintain a fixed price in the market.
“Further, the retailers demanded that the suppliers actively manage retail competition by co-ordinating retail prices for their respective fresh commercial bread products and ensuring pricing alignment amongst the retailers,” the documents read.
The pattern became colloquially known as the 7/10 convention, according to the documents — with a usual seven cent price increase at wholesale and 10 cent price bump for the consumer in stores. (Source: CBC)