Grupo Bimbo, Maple Leaf Foods Trade Lawsuits
There’s more legal action rising in the bakery world, with Grupo Bimbo and Maple Leaf Foods squaring off in various courtrooms.
On Nov. 29, Mexico City, Mexico-based Grupo Bimbo filed a statement of claim in Ontario, Canada, against Maple Leaf Foods, Inc. and some of its former officers. The company is seeking more than $2 billion (in Canadian currency, or CAD, equal to $1.4 billion USD) in damages, alleging that Maple Leaf Foods engaged in “fraudulent and negligent misrepresentation” during the sale of its Canada Bread business.
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According to Grupo Bimbo, after it acquired Canada Bread – then 90% owned by Maple Leaf Foods – that bakery was targeted in a price-fixing investigation. “A subsequent prosecution resulted in Canada Bread paying a fine of CAD $50 million in 2023 and an on-going class action brought against market participants,” Grupo Bimbo noted in a statement shared on its website.
Maple Leaf Foods, headquartered in Mississauga, Ontario, has also headed to court, suing Grupo Bimbo and Canada Bread for defamation in November. Maple Leaf contends that those organizations falsely charged the company with using Canada Bread as a front to cover for a price-fixing scheme.
“This is an abuse of judicial process, without any merit whatsoever. The Mexican company, Bimbo, is distracting attention from its own mismanagement of a Canadian business, by asserting ridiculous claims which are not even consistent with its own prior admissions,” said Michael H. McCain, executive chairman of Maple Leaf in a statement shared with Progressive Grocer. “To say we will defend against this frivolous action vigorously, would be a colossal understatement. Maple Leaf Foods and its officers acted appropriately at all times, including with respect to making full, plain and true disclosure to Grupo Bimbo at the time of its acquisition of Canada Bread.”
The broad price-fixing case can be traced back to 2015. The Competition Bureau of Canada claimed that bread companies and retailers – including Canada Bread – agreed to inflate the price of certain packaged bread products for a period between 2001 and 2015. Earlier this year, Loblaw Cos. Ltd. and parent company George Weston Ltd. announced a CAD $500 million settlement with claimants who took legal action against them in the scandal.
