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An Ontario Superior Court judge has given the green light for a class-action lawsuit alleging Canada’s largest grocers and bread makers manipulated bread prices and overcharged consumers by an estimated $5-billion over 16 years.

The decision, released on Dec. 31, means legal actions are now in progress in Canada’s two largest provinces over the issue. The Quebec Superior Court authorized another lawsuit over the alleged price fixing in 2019.

Three consumers launched the Ontario class-action on behalf of Canadian shoppers. The lawsuit names Loblaw Cos. Ltd. L-T; George Weston Ltd. WNGRF and its former subsidiaries Weston Bakeries and Weston Foods; Canada Bread Company Ltd.; Metro Inc. MRU-T; Sobeys Inc.; Walmart Canada; and Giant Tiger Stores Ltd. However, the judge dismissed a motion to certify the action against Sobeys parent Empire Company Ltd. EMP-A-T, Walmart’s American parent Walmart Inc. WMT-N and Canada Bread’s parent companies during the period (Maple Leaf Foods Inc. MFI-T sold the business to Mexico’s Grupo Bimbo in 2014.)

The price-fixing scandal became public in 2017, after Loblaw and its parent company, George Weston, revealed they had reached a deal with the federal Competition Bureau to avoid criminal charges over their role in an alleged conspiracy to fix bread prices between 2001 and 2015. The competition watchdog executed search warrants on the offices of several grocers in 2017. Its investigation is continuing.

Loblaw and Weston disclosed at the time they were involved in a scheme to artificially raise the prices of bread products, which the company said included its own stores and Weston Foods’ manufacturing business, as well as other retailers and competing bread maker Canada Bread. Loblaw and Weston said the scheme affected packaged breads, buns, bagels, rolls, naan, English muffins, wraps, pitas and tortillas.

Last month, George Weston closed the deal to sell its bakery business – which produces brands including Wonder Bread, ACE Bakery and Country Harvest – to Toronto-based FGF Brands Inc. for $1.1-billion. (The company has also agreed to sell the rest of the operation, which produces cookies, crackers, cones and wafers, to Illinois-based Hearthside Food Solutions LLC for $370-million.)

The Ontario lawsuit concerns any Canadian residents outside Quebec who bought packaged bread sold by any of the retailers or manufactured by any of the producers named in the lawsuit, any time between Nov. 1, 2001, and Dec. 31, 2021 – the day the court certified the class action. The plaintiffs estimate that could cover millions or tens of millions of consumers, as well as wholesalers and others who purchased bread from the manufacturers.

“It is, probably, almost everybody in the country who eats bread,” said Jim Orr, a partner at Toronto-based Orr Taylor LLP and a lawyer for the plaintiffs.

Mr. Orr said that the period carrying over to the end of 2021, reflects “continuing overcharges that result from the fact that the alleged improperly inflated prices were not reduced when the conduct became public, so damages continued to accrue.” He added that this means the damages could exceed the $5-billion alleged by the plaintiffs in the court documents, which covers only the period up to the time the investigation was made public in 2017.

The lawyers in the Ontario and Quebec cases have been collaborating on the issue, though the two cases are proceeding in separate jurisdictions. The Quebec case is in the midst of document discovery and is continuing, said Michael Vathilakis, co-founding partner of Montreal-based Renno Vathilakis Avocats Inc., one of two firms representing plaintiffs there.

In 2017, when the investigation was made public, Loblaw offered $25 gift cards as compensation to customers. In financial documents, the company said it expected the amount paid out through those cards would “be an offset against civil liability.”

Mr. Vathilakis said customers who received gift cards are still part of the affected class. “Our position has always been that we’re not going to accept that it means anyone has waived any rights,” he said.

Aside from Loblaw and George Weston, others named in the suit have denied participating in the alleged scheme.

“We see no evidence of any Sobeys involvement in the conduct being alleged and have seen absolutely no indication that Sobeys contravened competition law. It is unfortunate that our brand has been painted with the same brush as others,” Sobeys spokesperson Jacquelin Weatherbee wrote in a statement.

“Giant Tiger reaffirms our assertion that we have no reason to believe that Giant Tiger or any of our employees has violated the Competition Act,” Giant Tiger Stores Ltd.’s director of brand and customer communications, Aaron Wade, wrote in a statement.

Spokespeople for Loblaw, George Weston, Metro, Walmart Canada and Canada Bread owner Grupo Bimbo declined to comment. Representatives for Weston Foods owner FGF Brands did not respond to a request for comment.

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