Some Canadian shoppers may soon receive cash from a class-action lawsuit that accused Loblaw Cos. Ltd. and its parent company George Weston Ltd. of engaging in an industry-wide scheme to fix the price of bread.
Ontario Superior Court Judge Ed Morgan approved a $500-million settlement in the case on May 7, saying the money put forward by the grocery companies was “an excellent and fair result for all concerned.”
“It is in the best interests of the class as a whole,” he said in a written decision. “In my view, it falls squarely within the zone of reasonableness.”
The settlement he approved includes a combined $404 million to be paid by Loblaw and George Weston. The remaining $96 million is accounted for through a gift card program Loblaw began in 2018 and ran through 2019 in hopes of making amends with customers who paid about $1.50 more per loaf of bread.
Once legal fees and other court expenses are paid, 78 percent of the funds will be allocated to shoppers in Ontario with the remaining amount headed for people in Quebec.
Customers who bought bread between January 2001 and December 2021 and did not previously take a gift card from Loblaw will eventually receive up to $25.
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If there is still money left over after that distribution, funds will be divided among anyone who claimed the gift card.
Morgan’s decision ends one chapter in a saga that has lobbed allegations at the country’s biggest grocers, including Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger.
While these players have denied their participation in an alleged scheme to co-ordinate the price of bread back to 2001, Loblaw and George Weston told the Competition Bureau they were part of the practice in 2015. Their admission wasn’t publicized until 2017.
They then offered a $25 gift card to try to compensate customers, but shoppers weren’t appeased and in December 2019, a Quebec class action was filed against them and the other grocers. A Quebec court will hear arguments around whether to accept the Loblaw and George Weston settlement on June 16.
The Ontario class action was filed by Strosberg Wingfield Sasso LLP in December 2021 but only reached its $500 million settlement last year.
“The parties do not have to do much to convince me that the litigation has been hard fought on all sides,” Judge Morgan said in his decision.
Asked for comment on the settlement’s approval, Loblaw spokesperson Catherine Thomas pointed the Canadian Press to a 2024 statement that said, “we sincerely apologize” for involvement in the arrangement and “have taken a number of steps since that time to ensure this doesn’t happen again.”
“We know we have more to do to regain the trust of our customers and we’re committed to doing that,” the statement said.
A George Weston spokesperson did not immediately respond to a request for comment.
The agreement they put forward resolves all national bread price-fixing claims they faced or could face and includes assurances that they will co-operate with claims being pursued against the remaining grocers who did not offer a settlement.
The offer Loblaw and George Weston made garnered four objections and 475 opt-outs, which Judge Morgan said “are very small numbers in view of the estimated 20 million-plus class members.”
No one who objected to the settlement appeared in court to explain their views, but a review of their written submissions showed they were fighting the settlement because they would like more money, Morgan said.
“None of the objectors chose to speak at the hearing of the settlement motion, but a review of their written objections indicates that they have no principled grounds for objecting to the settlement other than that they would like more money,” Morgan wrote.
“While I sympathize with that sentiment, I am not in a position to compel that the settlement fund be increased, nor am I inclined to reject the settlement based on a small handful of class members who would like more.”
