Grupo Bimbo’s subsidiary, Canada Bread, is pursuing legal action against Maple Leaf Foods, demanding damages related to a C$50 million ($36.8 million) penalty incurred from a price-fixing scandal investigated by Canada’s competition authority.
The legal claim, filed in Ontario, targets Maple Leaf Foods, which divested Canada Bread to Grupo Bimbo in 2014. Notably, Maple Leaf Foods is contesting these allegations.
Last year, Canada Bread faced a significant fine after it admitted guilt to four counts of price-fixing spanning over a decade. This incident followed a broader inquiry by the Competition Bureau of Canada, which remains ongoing.
According to a recent statement from Canada Bread, “Maple Leaf used Canada Bread as a shield, causing Canada Bread to shoulder the liabilities of its wrongful actions, benefiting Maple Leaf in the process.” The company asserts its right to seek accountability through its “Statement of Defence and Crossclaim in the Ontario Superior Court of Justice against Maple Leaf Foods for its damages.”
In its statement—which did not include any direct management comments—Canada Bread emphasized, “We have initiated this legal action to ensure that Maple Leaf is held responsible for all associated costs, expenses, and damages resulting from these violations, particularly those linked to the Competition Bureau’s investigation.”
Additionally, Canada Bread’s claim states that if it is found liable in ongoing class actions, it will seek compensation and indemnification from Maple Leaf. Grupo Bimbo has indicated its intention to hold accountable those responsible for these damages.
In response, Maple Leaf Foods refuted Canada Bread’s claims entirely. Senior Vice President and General Counsel Suzanne Hathaway stated, “We reject these claims in their entirety. Maple Leaf Foods acted appropriately at all times, including with respect to providing full, plain, and true disclosure to Grupo Bimbo at the time of its acquisition of Canada Bread.”
Hathaway highlighted a previous court ruling from 2021, which determined that the plaintiffs had no valid legal claims against Maple Leaf, a decision that remains in effect.
The controversy traces back to December 2017, when Canadian firms Weston Foods and Loblaw, both part of the George Weston group, acknowledged their involvement in what was described as an industry-wide price-fixing scheme related to retail and wholesale bread pricing. In return for their cooperation with the Competition Bureau’s investigation, these companies received immunity from prosecution.
A spokesperson noted that it would be “inappropriate” to comment on the Canada Bread court proceedings, but added that investigations into other companies, including Metro Inc. and Sobeys Inc., are still underway. However, no determination of wrongdoing has been made yet, and no charges have been filed against these entities.
Canada Bread alleges that prior to Grupo Bimbo’s acquisition, Maple Leaf failed to comply with legal standards and breached management agreements with Canada Bread. The company’s statement underscored that from 1995 to 2014, Maple Leaf, as the controlling shareholder, appointed directors to Canada Bread’s board and positioned senior executives to govern operations, all while representing it would adhere to applicable laws during its services.
The claim suggests that personnel from Maple Leaf directed and engaged in anti-competitive activities that were part of the ongoing investigation into the commercial bread sector by the Competition Bureau of Canada.
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