TORONTO – Loblaw Cos Ltd. and its parent company George Weston Ltd., which operates Superstore and other grocery retail outlets, admitted this week to participating in a 14-year price-fixing conspiracy that inflated the cost of bread on the shelves of nearly every major grocery chain in Canada.
While the companies acknowledged that what they did was wrong, they likewise applauded themselves for reporting the scheme “upon discovering this anti-competitive behaviour.”
In the statement, the companies also let consumers know they’d be eligible for a $25 Loblaw gift certificate as reimbursement for their losses, reported MacLean’s Magazine. But some think it’s very low.
“That strikes us as very low,” says David Wingfield, a partner at Strosberg Sasso Sutts LLP., and one of two lawyers now leading a class action lawsuit that’s been filed against the parties implicated in the scheme. The claim, filed on behalf of a customer named Marcy David, seeks $1 billion in compensatory damages and another $100 million in punitive damages.
For its part, 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.
“I think it’s unconscionable,” says Jay Strosberg, the other lawyer involved in the class action, who wagers that many customers would have forked over much more than $25 in unjustified fees over the years. Indeed, bread is a dietary staple—a mainstay on the weekly grocery list, which families pony up considerable money for over time.
A loaf of bread is listed at $3.49. Say the company artificially raised costs by 10 per cent per loaf. After accounting for inflation, someone who purchased one loaf each week over the course of the 14 year scheme would be entitled to approximately $195.52—nearly eight times what Loblaw is offering. Or close to $400 for a family buying two loaves a week, according to MacLean’s number crunching.
For small businesses—cafes or restaurants—it’s easy to see how that cost can stretch into the thousands.
