Judge Approves Loblaws Bread Price-Fixing Settlement

GrumpyCanadian

In an interesting development, an Ontario judge has approved a $500 million settlement in the Loblaws bread price-fixing case. In all, I suspect that this was still a net profit for them, given that they got away with it for over 15 years.

Ontario judge approves $500M settlement in Loblaw bread-fixing case

Somewhat-Reticent

Unlikely.

Hydraglass

Somewhat-Reticent Yeah - they said on average it was $400 per household that people got shorted based on price hikes vs CPI and US price increases at the same time - across 10 million Canadian households that’s $4 billion they enriched themselves by over 15 years. The punishment is only 500 million - 1/8th the total they enriched themselves by. Even with the settlement they “got away with it”.

Somewhat-Reticent

Hydraglass Which should exclude costs from rising labor expenses.
( Where’d you see 10 million? Was that customers? )
Sets intriguing precedent for suits against other cartel participants.
( Ain’t over … )

Hydraglass

Somewhat-Reticent They said 6 million people were expected to take part in the settlement, and then in the judgement paperwork it said that represented approximately ⅔ of the households in Canada. Even if we only counted the 6 million households that put in a claim, at $400 overcharges vs normal inflation over the 15 years, that would be $2.4 billion – so the $500mil settlement would still at best only represent about 20% of the unlawful enrichment that they saw on their books. Considering its 10-15 years later, that $2.4 billion extra they made would be better represented by about $3 billion after inflation. In any case - the fines are a mere pittance compared to the unlawful enrichment the companies saw.

The best “reward” we members of the settlement can expect is on the order of a cheque for about $60 - a pittance compared to the $400-$500/household that it should be. We buy probably on average 2 loaves of bread a week and have for the last 25 years in our household. During the period of this price fixing - lets be generous and say only 10 years - that would be about 1000 loaves of bread. We overpaid between $0.50-$1.00 per item at minimum per the settlement paperwork. That means they probably got an extra $1000 out of my household through their scheme.

Somewhat-Reticent

Hydraglass Thank you for sourcing customer numbers.
( I did see “estimated 20 million-plus class members” )

The $400∓ figure may include other influences besides cartel price-fixing.
Did anything provide the court’s calculations and reasoning?
Fraction of benefit to Loblaws, as compared to others like Grupo Bimbo?

Hydraglass

Somewhat-Reticent The $400∓ figure may include other influences besides cartel price-fixing.
Did anything provide the court’s calculations and reasoning?
Fraction of benefit to Loblaws, as compared to others like Grupo Bimbo?

There wasn’t a lot of details as to the breakdown of responsibility in the court judgement documents that have been posted, but I assume there was division of enrichment calculations across all of the benficiaries of the scheme. Other stores such as WalMart and Sobeys were also beneficiaries of the scheme, as well as groupo bimbo and its predecessor as the bakers. At the end of the day - I don’t think the public will be anywhere near recouping their losses but hopefully the penalties are large enough to discourage someone from trying it again down the road any time soon, knowing it would yield more than a slap in the wrist.

ElQuintron

Hydraglass Even with the settlement they “got away with it”.

aka “The cost of doing business”

Thane_Bitter

ElQuintron aka “The cost of doing business”

…Remains contemptuously cheap.

ElQuintron

Thane_Bitter Loblaws has nothing but contempt for us.

GrumpyCanadian

The entirely-unsatisfactory details of the upcoming settlement were discussed:

How you can get your dough in the $500M Loblaw bread-fixing settlement

So, yes, it looks like this supposed “settlement” will fall far short of making customers whole; a gift to Weston and his shareholders.

ugly95

ElQuintron Loblaws has nothing but contempt for us.

I think they showed how little they think of us when they started pushing Galen Weston in their ads.

Somewhat-Reticent

GrumpyCanadian Class-action suits always will, since lawyer fees …

Thane_Bitter

Somewhat-Reticent You may have missed the longevity of this insider scam, the company made billions over the years from their price fixing, the lawyers in this class action get nothing but peanut shells in comparison to that amount, and the consumer (the actual victim) award is to lick the floor if they choose to, for any crumbs that might be left.

Justice is a wonderful theory which has yet to be observed.

GrumpyCanadian

The official claims portals are now live. Unless I’m missing something, this is hardly “justice” or “reparations” to those who were actually harmed in this scheme. Unless I have completely misunderstood, the maximum claim will be $25 for those who didn’t previously claim the $25 gift card. If there’s anything left over after the claims are paid, the article seems to say that those who already got the gift card will be entitled to a share of whatever is left.

Want a slice of the $500M bread price-fixing settlement? The claims process is now open

So, how does “up to” $25 come anywhere near righting the wrong? Even if one only buys one loaf every other week, and if we grant that the price was only ever inflated by $1.50, one would have already over-paid by $39 in the first year of this fraud, and it went on for about 15 years. In other words, it was a nice gift to Galen — a sizeable net profit — with virtually no consequences.

GrumpyCanadian

It’s not clear to me where they came up with the “up to $25” figure in the article. I don’t see that on the Quebec claims portal. In fact, it says:

The amount of compensation payable to each claimant will depend on the number of claims approved by the Quebec Settlement Administrators.

I also note that the form asks for a date of birth. Is that really necessary for them to get the privilege of supposedly righting the wrong they committed on their own initiative?

Dks01

Filled out and submitted. Easy stuff.

GrumpyCanadian

For anyone who is interested, and still hasn’t filled in the form, the December 12 deadline is nearly here. From the second article:

Claimants have until Dec. 12 to apply.

Each claimant could get a minimum of $50, according to Verita, an independent administrator for the settlement.

But it could be $100 or more, says Jay Strosberg of Strosberg Wingfield Sasso LLP, the law firm that filed the class-action suit in Ontario.

Anyone already fill out the form? Why or why not (if you don’t mind sharing)?

KingB71

got my payout for this today. Funny, I got a gift card way back when for this, and apparently was only entitled to $25 but got the full $49.xx, not that I’m complaining

Donoreo

I got two payments, $24.11 each