Maple Leaf Foods Inc. has launched a defamation lawsuit against Canada Bread Co. Ltd. and its parent company Grupo Bimbo SAV de CV.
The controversy dates back to a 2016 investigation by Canada’s Competition Bureau into an alleged price-fixing conspiracy in the bread industry. The Bureau claimed that between 2001 and 2015, major suppliers and retailers colluded to artificially inflate the price of bread by at least CA$1.50 per loaf.
This resulted in two class-action lawsuits (in Ontario and Quebec).
In 2023, Canada Bread admitted to four counts of price-fixing and agreed to pay a fine of CA$50m to settle the two class-actions, the largest ever in a Canadian price-fixing case. Canada Bread was also banned from federal contracts over scheme.
But while its guilty plea brought some closure to its role, the producer and distributor of packaged fresh bread and bakery products has shifted its focus to hold others accountable.
In a September 2024 court filing in an Ontario court as part of one of the class actions, the company accused Maple Leaf of breaching its management agreements and Canada’s Competition Act. It also alleged Maple Leaf’s leadership not only knew about but also enabled the price-fixing scheme. It also accused Maple Leaf of using it as a ‘shield’ to dodge liability.
Maple Leaf’s retaliation
In response, Maple Leaf Foods filed a defamation lawsuit in the Ontario Superior Court of Justice on 21 November 2024. According to Mississauga-based company, the accusations are not only unfounded but also part of a broader strategy to deflect blame for mismanagement and legal fallout.
“Self-serving allegations Grupo Bimbo and Canada Bread have made publicly in the period since the existence of the [Competition] Bureau’s investigation became known that MLF [Maple Leaf Foods] was aware of or played a role in the alleged [bread price-fixing] conspiracy are unfounded, defamatory and equally devoid of merit,” Maple Leaf said in the 21 November filing.
“Throughout the period from at least late October 2017 to November 2024, Grupo Bimbo and Canada Bread have continued to conspire and collude in an effort to falsely and unfairly blame MLF for their self-inflicted wounds and business failures and to lay the groundwork for unfounded claims Canada Bread and Grupo Bimbo have indicated they intend to commence against MLF.”
A legacy of liability
Maple Leaf’s position in the dispute is complicated by its historical ties to Canada Bread.
Owning 90% of Canada Bread’s voting stock until 2014, Maple Leaf held significant influence over the company’s operations. Critics argue this ownership makes Maple Leaf complicit in any anticompetitive practices during that period.
Michael McCain, Maple Leaf’s former CEO and current executive chairman, has been a central figure in the defense. He has denied any involvement in price-fixing, insisting the company’s pricing practices were consistent with industry norms.
“We continue to believe that the pricing practices of Canada Bread were responsible, consistent with industry practice and above all, lawful,” McCain stated on Maple Leaf’s website in 2023.
Maple Leaf Foods’ claim is completely without merit.
Canada Bread
Canada Bread has issued a statement in response to Maple Leaf’s defamation lawsuit.
“Canada Bread is aware of Maple Leaf Foods’ latest actions,” it has counterclaimed.
“Maple Leaf Foods’ claim is completely without merit. We have no further comment regarding litigation between the parties.”
Grupo Bimbo has joined the chorus of accusations. In the statement, Canada Bread, which also trades as Bimbo Canada, noted the Mexican conglomerate “intends to hold accountable those responsible for its damages.”
Battle of strategies
The bread price-fixing scandal has ensnared multiple players in the Canadian food industry.
Retail giants Loblaw and Weston Foods – both subsidiaries of George Weston Ltd. at the time – admitted to participating in the scheme but were granted immunity in exchange for cooperation. Their confessions, though, paved the way for class-action lawsuits, hefty settlements and intensified scrutiny of industry practices. In June 2023, Loblaw and George Weston settled their class-action lawsuits for a combined $500m, while other implicated companies continue to deny involvement.
Maple Leaf was originally excluded from the lawsuits but has faced renewed efforts by the plaintiffs for the Ontario-based class action lawsuit to add it as a defendant, citing its ownership of Canada Bread during the alleged conspiracy.
The legal battle shows no signs of abating. With defamation claims, counterclaims and class-action lawsuits unfolding simultaneously, the case promises to set important precedents for corporate governance, shareholder accountability and competition law.
For the food industry, the fallout serves as a cautionary tale. The reputational and financial costs of price-fixing extend far beyond regulatory fines, affecting trust, partnerships and market positioning.
One thing is clear: the bread price-fixing scandal has proven far more costly than the price of a loaf.