Canada Bread owner Grupo Bimbo is suing Maple Leaf Foods for more than $2 billion, claiming it lied about the company’s involvement in an alleged bread price-fixing conspiracy.
Posted at 3:23 p.m.
Updated at 5:03 p.m.
Rosa Saba
The Canadian Press
The filing of the lawsuit comes a week after Maple Leaf, which was Canada Bread’s majority shareholder until 2014, announced a lawsuit against Grupo Bimbo.
Canada Bread argued that Maple Leaf used it as a “shield” to avoid liability for the alleged scheme.
The alleged price-fixing conspiracy is also the subject of two class actions and an ongoing Competition Bureau investigation.
Canada Bread is the only company to be fined as part of the Competition Bureau’s investigation. The company pleaded guilty to four charges of price fixing in 2023 and was fined 50 million. However, she denied participating in a “large-scale conspiracy.”
Grupo Bimbo’s lawsuit contends that Maple Leaf caused Canada Bread to engage in the alleged conspiracy and deliberately withheld this information from Grupo Bimbo during the sales process. Separately, Maple Leaf is suing Grupo Bimbo for defamation, saying allegations that the company knew about or played a role in the alleged conspiracy are baseless.
None of the allegations have been tested in court, and both companies deny the accusations made against them by the other side.
“To say we will vigorously defend ourselves against this frivolous action would be a colossal understatement,” Maple Leaf Chairman and CEO Michael McCain said in a written statement, calling the suit meritless.
Mr. McCain, the company’s former chief executive, is named as a defendant in the Grupo Bimbo suit.
“Maple Leaf Foods and its management acted appropriately at all times, including with respect to providing full, clear and truthful disclosure to Grupo Bimbo at the time of its acquisition of Canada Bread,” he said.
Mexico-based Grupo Bimbo said in the statement of claim that it purchased all of Canada Bread’s outstanding shares in 2014 for approximately $1.83 billion. The acquisition price was based on Maple Leaf’s alleged misrepresentations that Canada Bread was in compliance with applicable laws and had made appropriate disclosures about its operations, the company argued.
Grupo Bimbo, which includes Villaggio, Vachon, POM and Bon matin under its brands, claims that Canada Bread participated in the alleged price-fixing conspiracy under the direction of Maple Leaf, which “itself was a participant in and profiteer from the conspiracies.”
Canada Bread has previously said that any anti-competitive conduct it participated in was at the direction and for the benefit of Maple Leaf.
Maple Leaf said in its defamation suit that the Bureau’s allegations against Canada Bread regarding an alleged conspiracy were unfounded.
The Competition Bureau’s investigation began in 2016. It alleged that at least $1.50 was added to the price of a loaf of bread over a 16-year period.
Canada Bread, like major grocers and other companies, is a defendant in both class actions, although Loblaw and George Weston — who were granted immunity from suit after admitting to participating in a “fixing agreement industry-wide pricing” – recently settled both lawsuits for a combined $500 million.
The other companies involved in the current lawsuits have denied participating in the alleged bread price-fixing scheme.
