CFIG says it did not request investigation into bread price fixing

The Canadian Federation of Independent Grocers (CFIG) said Thursday it does not believe it triggered the criminal investigation into bread price fixing by Canada’s Competition Bureau.

The CFIG received just two isolated complaints from two small grocers in rural Canada in 2015, Gary Sands, senior vice-president, public policy and advocacy, told Canadian Grocer in an email.

The complaints were passed along to the Competition Bureau, but there was not a formal request on behalf of CFIG members. “We did not ask for any investigation. We didn't ask for any action or a response,” he said. “Obviously, there is other information we are not privy to that prompted the Bureau action.”

The packaged bread market in Canada is dominated by two players: Canada Bread owned by Grupo Bimbo and Weston, which also owns Loblaw.

“The complaints I received were that prices were moving in lockstep between the two suppliers,” said Sands.

News broke Tuesday evening that the Competition Bureau had been granted search warrants for several corporate offices as part of a criminal investigation into alleged price fixing of bread. Sobey’s, Metro, Walmart and Loblaw all said they're cooperating with the investigation. Sobey’s confirmed that investigators were at its offices and, according to a report in the Globe and Mail, expect the investigators to be there for 10 or 11 days.

Read: Industry analysts bewildered by bread price-fixing allegations

Competition Bureau spokeswoman Marie-France Faucher said the bureau was conducting the searches and gathering evidence to determine the facts, but that there had been no conclusion of wrongdoing at this time and no charges have been laid.

Faucher added that she could not reveal more details, as the bureau is required to conduct investigations confidentially. The application and search warrants are also sealed.

Canada’s Competition Act prohibits agreements that “prevent or unduly lessen competition or to unreasonably enhance the price of a product.”

While the investigation is still in its early days, experts expressed surprise by the news.

“It seems a little bizarre, because all the grocers and all the big companies have fairly strong policies, compliance programs and training for employees not to do this,” said Bruce Winder, the co-founder and partner of Retail Advisors Network.

John Williams, a partner at retail consulting company J.C. Williams Group, called the probe “shocking” given that Canada’s major retailers are governed by very well-defined codes of ethics.

He also noted the bread industry had been in “turmoil” as consumers look for healthier or artisan versions of the food staple, pushing producers to innovate with new varieties to stay competitive.

“It now has almost become a fashion item… Huge aisles of white bread are slowly shrinking,” Williams said.