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Price fixing in grocery stores may not be as rare as we believe it to be

December 20th, 2017  |  Canadian Business

Earlier this week it was exposed that Loblaw Companies Ltd and George Weston Ltd. had been fixing prices for over a decade. The companies came forth to the Canadian Competition Bureau, and revealed that from 2001 to 2015 they engaged in the price fixing of a number of bread products.

Well, it turns out that price-fixing among grocery chains may be more commonplace than we realize. According to court documents, the Canadian watchdog is also looking into the alleged involvement of Canada Bread, Walmart, Sobeys, Metro and Giant Tiger as well as "other persons known and unknown."

"Price-fixing cases are actually quite common," said Jim Brander, a professor at the University of British Columbia's Sauder School of Business in Vancouver.

In the case of Loblaw Companies Ltd and George Weston Ltd, because they came forward, both companies will receive immunity and face no legal action.

According to Fred Lazar, associate economics professor at York University's Schulich School of Business in Toronto, it is very difficult to be caught and prosecuted for price fixing. Which he went on to note is evident since the country’s biggest grocery chain got away with it for almost 15 years.

"What's required for the Competition Bureau to have a case is a smoking gun," he said. "Some type of memo, some letter, something on a computer that basically states, 'Yes, you know, my competitor and I are co-operating and we're increasing prices."