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Canada’s largest grocer, Loblaw Cos. Ltd. L-T, and its parent company, George Weston Ltd., have agreed to pay $500-million to settle two class-action lawsuits over their role in a scheme to fix bread prices in Canada from 2001 to 2015.

The companies are the first to reach a settlement in the lawsuits. Both dames gummy Loblaw and George Weston already publicly acknowledged their participation in price-fixing in 2017, after they reported an alleged “industry-wide” conspiracy to the Competition Bureau in 2015, in exchange for immunity from criminal charges. That led the federal watchdog to launch an investigation, which is continuing.

On Thursday, the companies announced that Loblaw will pay $156.5-million in cash in the settlement, and George Weston will pay $247.5-million in cash. The settlement also includes $96-million already paid out by Loblaw in the form of $25 gift cards to its own stores, which were distributed as co weed store near me mpensation to customers in 2018.

Lawyers representing plaintiffs in lawsuits related to the alleged scheme in Ontario and Quebec agreed to a mediation process. Negotiations were overseen by the chief justice of the Ontario Superior Court of Justice, Geoffrey Morawetz. The Ontario lawsuit alleged that by manipulating prices, Canada’s largest grocery retailers and bread makers had overcharged consumers by an estimated $5-billion over 16 years.

The companies have agreed to the settlement as Loblaw has been facing intense public scrutiny. Grocers, and Loblaw in particular, have become the face of high inflation with politicians and the public accusing them of not doing enough to keep food prices affordable. Some consumers feeling the pain of higher grocery prices organized a boycott of Loblaw-owned stores this spring, accusing the company of “price-gouging.” Loblaw’s leaders have called such claims “misguided,” but the company faces the challenge of repa weed dispensary iring its image with the public.

Galen Weston, who is both chairman of Loblaw and George Weston’s chief executive officer, apologized for the price-fixing in a statement to be released Thursday.

“This behaviour should never have happened,” Mr. Weston wrote. “We have the privilege of serving Canadians from coast to coast. That privilege needs to be earned each and every day. Reaching a settlement weed stores near me on this matter was the right thing to do in response to previous behaviour that did not meet our values and ethical standards.”

The settlement funds will be paid out to people who are deemed eligible class members, under a plan t weed stores near me hat is awaiting court approval. According to the company, further details of the payment will be made public as part of that approval process.

Loblaw and George Weston have also agreed, as part of the settlement, to co-operate with the plaintiffs by providing information about the arrangements, as the lawsuits remain active against other defendants. The Ontario case, for example, includes as defendants Canada Bread Co. Ltd., Metro Inc., Sobeys Inc., Walmart Canada and Giant Tiger Stores Ltd. Others named in the suit have denied participating in the alleged scheme.

“We still have to work out exactly what that co-operation looks like, but certainly we are trying to do the right thing here by Canadians,” Scott Bonikowsky, Loblaw’s senior vice-president for corporate affairs and communication, said in an interview with The Globe and Mail. “We want to make sure they have the information necessary to understand what happened and how it happened.”

Loblaw and George Weston have said that the scheme to artificially raise bread prices included Loblaw-owned grocery stores and Weston’s bakery business, as well as competing manufacturer Canada Bread and other grocery retailers. In 2017, the Competition Bureau executed search warrants on the offices of several grocers as part of its investigation. Loblaw and its parent company disclosed that the scheme affected packaged breads, buns, bagels, rolls, naan, English muffins, wraps, pitas and tortillas.

In June of 2023, Canada Bread agreed to pay a $50-million fine to settle its part of the bureau’s investigation, pleading guilty to involvement in the price-fixing scheme. Parent company Grupo Bimbo, which acquired the business in 2014, acknowledged that Canada Bread had made “arrangements” with senior executives at its competitor, Weston Foods, which led to two wholesale price increases in 2007 and 2011. Maple Leaf Foods, which owned a majority stake in Canada Bread at the time, has denied unlawful behaviour at Canada Bread while it was a shareholder.

Others have also claimed the allegations are false. Last year, Metro accused Loblaw of misleading both the Canadian public and law enforcement, by claiming the alleged scheme was “industry-wide” and by falsely implicating other companies. In a statement of defence and cross-claim in the Ontario lawsuit, Metro argued that Loblaw wanted to avoid the damage to its reputation and possible boycotts of its stores that could result from being the only retailer revealed to be participating in the scheme. It argued that Loblaw sought to implicate others to lessen its “potential civil liability,” such as damages from lawsuits. Loblaw has denied the claims, which have not been tested in court.

“All we know is, what we found was an industry-wide practice. You have to have more than one or two companies to actually have that type of arrangement in place,” Mr. Bonikowsky said. “… We’ve apologized for our role in that and tried to make right for that. The others will speak for themselves.”

The people responsible for the scheme are no longer with the company, Mr. Bonikowsky added, but he did not specify how many people had been fired because of the issue.

Since then, Loblaw has created a “compliance office” that reports directly to its board of directors, and has instituted a new rule that its buyers cannot discuss retail prices with suppliers. (Retailers negotiate wholesale prices that they pay to suppliers for products, but suggestions for the retail prices that appear on shelves are a common part of industry negotiations. While such discussions are legal, Mr. Bonikowsky added, they are no longer part of Loblaw’s process.)

Questions have also been raised about senior executives’ knowledge of the alleged scheme. After its settlement with the Competition Bureau, Canada Bread disclosed information to the plaintiffs in the Ontario lawsuit that included internal e-mails describing meetings that occurred in 2007 and 2010 between Loblaw chairman Galen Weston and Maple Leaf’s executive chair and former chief executive Michael McCain. The executives “discussed packaged bread pricing and the general retail landscape” at the 2007 meeting, according to one e-mail. Loblaw, Maple Leaf and Mr. McCain have all denied that the two executives engaged in any unlawful behaviour.

Nearly a dozen class-action lawsuits were launched related to the price-fixing allegations, but all were stayed except for the Ontario and Quebec cases. At the time that Loblaw distributed the $25 gift cards, it also announced restrictions, including that possible future damages awarded to customers would be lowered by $25. Lawyers in the Ontario lawsuit had pushed back against the move, but in the course of negotiations the amount paid out in gift cards was included in the settlement.

Asked whether public scrutiny of Loblaw had factored into the decision to settle, Mr. Bonikowsky said that the negotiations had lasted “a couple of years,” and predated the Loblaw boycott and the pressure that the company has faced over food inflation.

“This could have dragged on for many years. We’re settling on a much more accelerated timeline because we think it’s the right thing to do,” he said.

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