These are Dickensian times. As the entire globe grapples with income inequality, the U.S. government is gleefully handing out tax cuts to billionaires, while Ontarians bicker over a rise in the wage of the province's lowest earners. It's a fitting backdrop for widespread anger about one of Canada's richest families overcharging the masses for bread.
Just before Christmas, spokespeople for Loblaw Companies Ltd. and its parent company, George Weston Ltd., admitted to a scheme to increase the price of the daily staple. This is a big deal: Loblaw is the country's primary grocer, with over 2,000 stores, including No Frills, Shoppers Drug Mart (which carries bread among its other overpriced groceries), T&T, Fortinos and others.
I imagine most people buy bread at one or two of these stores at least occasionally. My own family shops at No Frills regularly and Shoppers in a pinch. This fleecing has been going on for over 14 years – Loblaw owes us all.
Now, Canadians are able to sign up for a $25 gift card meant to soothe our collective irritation. When Loblaw announced the card in December, it estimated that three to six million people would participate. The company said it expected to spend up to $150-million on this clear attempt at mitigating both financial and public-relations losses.
The gift card tactic seemed to work for a minute, with many people getting excited about what was essentially a bribe. But my household goes through two loaves a week. If I was being overcharged 25 cents each time – an invented number, since I haven't been given a real one – Loblaw is coming up at least $300 short.
Criminal problems were already off the table, since Galen G. Weston, chairman and CEO, and other Loblaw executives are participating in the Competition Bureau's immunity and leniency program. That means they'll face no criminal charges or fines for the decade-plus they spent overcharging an entire country for a basic food.
The company notified the Competition Bureau of its own bread price fixing and was given criminal immunity.
"As a result of the co-operation we have provided to the Competition Bureau, neither George Weston Ltd. nor Loblaw or their respective employees will face criminal charges or penalties," Mr. Weston said in December.
"This sort of behaviour is wrong and has no place in our business or Canada's grocery industry," he continued, which is true enough. It's also a much safer statement when the issue of a maximum 14-year (oh, the irony) jail sentence is off the table.
I was nonplussed by the suggestion, floated on social media, that Canadians could patch together a silver lining by donating their cards to a food bank. That's a sweet idea, which Loblaw might have done pro-actively if its management was actually regretful. Still, I believe most people prefer supporting themselves over receiving charity. This solution lets Loblaw off the hook for stealing dignity from the working poor.
Thankfully, the initial $25 buzz wore off. So far, seven potential class-action suits have been launched, including one out of Manitoba being championed by Derek Nepinak, the former grand chief of the Assembly of Manitoba Chiefs.
In Ontario, a suit being led by Sotos LLP has as its lead plaintiff Irene Breckon, a senior citizen and the head of the Anti-Poverty Coalition in Elliot Lake, Ont.,who said she, too, bought bread on a weekly basis.
On behalf of all Canadians who bought bread from Loblaw and its subsidiaries, both Mr. Nepinak and Ms. Breckon are asking for $1-billion in damages. For context, Loblaw earned $1.4-billion in 2016, before tax, and the Weston family fortune was estimated at $13-billion late last year.
This week, Loblaw announced that, remorse aside, it reserves the right to limit the number of cards it sends out. The company is also warning customers who take advantage of the payback that any future legal winnings will be minus that $25 – on Tuesday, Ontario Superior Court judge Edward Morgan ruled that this was a fair way to deal with the issue, albeit one that might not hold up if a class action suit is successful. "At that stage, it may become relevant to consider whether it is appropriate that part of any settlement payment by Loblaw be composed of a $25 card that can only be used at a Loblaw store," Judge Morgan said.
"This is effectively a coupon Loblaw is offering to get people into the store," says Louis Sokolov, one of Ms. Breckon's lawyers, who specializes in class actions and employment law. It's impossible to say how his or any of the other suits will go, but he's overwhelmed by the response of people getting in touch to see if they can participate."I've never had a response like this in terms of any antitrust class action, both the number of people and the level of outrage people are expressing," Mr. Sokolov said.
I, for one, am glad, since I was suspicious of the mid-December timing of the original announcement. To mention legal immunity in passing while touting a $25 giveaway during the shopping season seemed, well, rather stale.
Like a celebrity couple announcing a divorce on a Friday evening, Loblaw seemed to be hoping we'd all be too eager to get our holiday started to pay much attention. Perhaps that's ungenerous of me, but not half as much as overcharging for a loaf of bread.