The $500 million settlement to end two class action lawsuits related to bread price fixing in Canadian grocery stores is only the first instalment of a legal saga that is likely to escalate, the lead lawyer for the plaintiffs says.
Jay Strosberg, managing partner of Strosberg Wingfield Sasso LLP, which has led two class action lawsuits into the bread price-fixing story, told BNN Bloomberg in an interview Thursday morning that the companies involved “did the right thing” in agreeing to settle, but the lawsuit against other alleged players in the scheme is ongoing.
Under the terms of the deal —the largest such settlement in Canadian history — bakery giant George Weston Ltd. will pay $247 million, while grocer Loblaws will kick in $156 million in cash for their role in a decade-long conspiracy to fix the price of bread.
Court documents allege that food chains colluded in secret to artificially inflate the consumer price of bread by as much as $1.50 per loaf in a scheme that ran from 2001 to 2014.
Loblaws blew the whistle on the arrangement in 2017 and secured immunity from prosecution in an ongoing Competition Bureau probe into the plan that the agency says involved Canada Bread, Sobeys, Metro, Wal-Mart Canada, and Giant Tiger. All of those firms dispute the allegations and say they weren’t involved in the arrangement that Loblaws says existed.
Although Lobaws was granted immunity from the Competition Bureau probe, they were still open to civil damages, which is where Strosberg and other law firms came in.
The $500 million figure includes the roughly $96 million worth of gift cards that Loblaws doled out to consumers back in 2017 when the story first came to light. In its second quarter earnings report this morning, Loblaws says it booked a $164 million impairment charge related to the settlement.
Strosberg says the deal announced today is the “first instalment” in a legal matter that is destined to escalate because the companies have agreed to co-operate and provide evidence against others allegedly involved. “We are now going to have the evidence to allow us to go against those that remain.”
While it’s hard to come up with a final number or timeline, Strosberg said “we’re going to be distributing hundreds of millions of dollars to people across the country.”
“The jig is going to be up,” he said.
