Manitoba

Former Manitoba grand chief files $1B class-action suit over bread price-fixing

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Derek Nepinak is lead plaintiff in case against companies investigated in industry-wide bread price-fixing

Derek Nepinak, the former grand chief of the Assembly of Manitoba Chiefs, is the lead plaintiff in a $1 billion class-action lawsuit against multiple Canadian grocers. (The Canadian Press)

Derek Nepinak, the former grand chief of the Assembly of Manitoba Chiefs, has filed a $1 billion class-action lawsuit against multiple Canadian grocers after Loblaw Companies said it participated in industry-wide bread price-fixing for 14 years.

Nepinak is the lead plaintiff in the case on behalf of all Canadians who purchased bread from the grocery giants beginning in January 2001. He is being represented by Winnipeg-based law firm Boudreau Law.

"I know majority of the Canadians, they [say], 'Well, it's a couple of cents on each loaf of bread, it doesn't really matter.' But for the poorest of the people, who are really affected by a couple of cents on the loaf of bread, that is significant," lawyer Norman Boudreau told CBC News.

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"We are hoping with Derek's involvement in this that First Nations will in fact join the class action."

The statement of claim, filed at Manitoba's Court of Queen's Bench on Dec. 29, names Loblaw Companies Ltd. and its parent company George Weston Ltd., the baking giant Canada Bread Company Ltd., and the retailers Walmart Canada, Metro Inc. and Giant Tiger Stores Ltd.

None of the claims have been proven in court. Defendants in Manitoba have 20 days to file a statement of defence, while those outside the province have 40 days.

In December, George Weston and Loblaw revealed the companies participated in an industry-wide bread price-fixing arrangement. They notified the Competition Bureau and have co-operated with the investigation, receiving immunity from criminal charges that may arise.

Metro, Sobeys, Canada Bread and Walmart Canada also said they were fully co-operating with the investigation.

The suit claims the companies conspired to limit the production of bread to inflate the price from January 2001 to Dec. 20, 2017, contrary to the Competition Act. That means Canadians paid higher prices than they would have if the companies were not acting illegally, the statement of claim says, and the price-fixing was "reckless, without care, deliberate and in disregard of the rights of [Nepinak] and members of the [class action]."

Winnipeg lawyer Norman Boudreau says the class-action lawsuit will help the poor and discourage businesses from any future consideration of price-fixing. (Kelly Malone/CBC)

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It's not the first class-action suit since the investigation became public. A senior citizen and anti-poverty activist from Elliot Lake, Ont., represented by Toronto-based law firm Sotos LLP, has also filed a $1-billion lawsuit.

Saskatchewan-based Merchant Law Group LLP is also pursuing a class-action lawsuit.

The multiple suits could lead to a motion for carriage, which would see one firm chosen to proceed. But Boudreau said it is more likely there will be a consortium of firms that will lead the class action, similar to the recently settled class action against Volkswagen.

Regardless, the case is expected to be large and include a lot of Canadians, and Boudreau said he hopes it sends a message to other companies that "there is enough profit to be made without having to fix prices."

"Manitobans and Canadians take an issue like this seriously," he said.

In order for the class-action lawsuit to proceed, it will have to be certified by a judge.

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Loblaw has since offered a $25 gift card as an apology to customers but Boudreau said Canadians should be hesitant to take up the offer.

"We don't know what the terms of the gift certificate [are]. In fact, Canadians may hamper their rights in using that gift certificate," he said.

"It may preclude them from being part of this class action or benefiting any advantage that this class action may provide."

Loblaw has said it expects as many as six million Canadians will receive the gift card and it will cost them $75 million to $150 million. Some people have suggested people donate those cards to food banks, but Boudreau said the payout of the class action should be worth much more.

'Drop in the bucket'

The president of the Consumer's Association of Canada (CAC), Bruce Cran, calls the price-fixing "disgusting" and also cautions people against taking the gift card without reading all the fine print.

"First of all, $25 is a drop in the bucket. It's nothing like you would have paid out for bread over that time in excess of what the price should have been," he said.

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"You can take that $25 or you can join the class-action lawsuits, and our feeling at the moment is you might just as well joining one of the class-action lawsuits and see what comes out of it."

Cran said he would like to see the companies held accountable for the price-fixing to make it very clear to others that if it's done there will be serious consequences, both criminally and financially.

"Bread is something that most families in Canada eat, it's certainly a main part of the diet of Canada," he said.

"To see something like this happen from the biggest grocery retailer in Canada is quite disgusting."

The CAC is monitoring the situation and will be releasing advice for consumers next week, he added.

Reached for comment, a spokesperson for Giant Tiger said via email the company has "no reason to believe at this time" that it or any of its employees was involved with a price-fixing scheme. The company declined to comment on the class-action suit.

A Walmart spokesperson said the retailer "takes its legal obligations very seriously" but would not comment on the lawsuit as it is before the courts.

The other companies in the lawsuit did not respond to calls for comment.

With files from The Canadian Press