Loblaws 'Gift' Card Paltry Compensation for Years of Price-Gouging

When billionaires hurt poor families, none of them ever pay a meaningful cost.

By Michael Nabert
Published January 30, 2018

This card is an effort to show our customers that we take this issue and their trust seriously. That's why we're offering back a tiny fraction of what we stole from Canadians in an incredibly self-serving way to try to sweep aside the fact that we took their trust seriously enough in the first place to have ripped off the entire country for more than a decade.

No Loblaws spokesperson has said that in plain English, but it's painfully clear in their handling of the bread price fixing scandal. Loblaws is trying hard to hammer the idea that they are offering everyone $25 into our heads, and insists that their "gift" card releases them from $25 worth of what they owe you.

Of course, what is missed in that discussion is the fact that they aren't offering anyone $25. They are offering us what they sticker price at $25 after markup (so somewhere between $12-13, most likely), specifically in a way that is designed to get people to go and shop in their stores.

That, in turn, will result in sales above $25 in theoretical value every single time, although you are more than welcome to spend time in the store trying to calculate exactly what purchases will ring up at the till at twenty five dollars exactly and not a penny more.

According to an analysis by Macleans, that $25 does not come close to covering how much you have been overcharged.

Maclean's crunched the numbers for several hypothetical scenarios to find how much someone might spend on bread over 14 years before and after price fixing. The findings, while speculative, reflect Wingfield and Strosberg's assessment that $25 is woefully insufficient.

Take, for instance, the popular Loblaw bread brand Country Harvest as a theoretical case study. A loaf of bread is listed at $3.49. Say the company artificially raised costs by 10 percent per loaf. After accounting for inflation, someone who purchased one loaf each week over the course of the 14 year scheme would be entitled to approximately $195.52 - nearly eight times what Loblaw is offering. Or close to $400 for a family buying two loaves a week.

For small businesses - cafes or restaurants - it's easy to see how that cost can stretch into the thousands. Of course, it's possible Loblaw was more conservative in its gouging. Say it raised prices by just 5 percent. Then, weekly bread-buyers would still be out $102.44.

Loblaws of Canada has admitted to its part in a fourteen-year-long price fixing scheme to inflate the price of bread. Any Canadian who has eaten bread purchased from Loblaws, Canada Bread, Weston Bakeries, Walmart, Sobeys, Metro, or Giant Tiger in nearly a decade and a half has been deliberately ripped off to maximize billionaire profits.

Loblaws clearly planned hard to get in front of this atrocity right out the gate by having its $25 gift card "apology" available to try to limit customer anger and buy back public goodwill, a move which they estimate will cost the company somewhere around $150 million.

So what does that $150 million dollar "apology" add up to? Let's consider that Loblaws Companies enjoyed revenue of more than $46.3 billion [PDF] in 2016, so their gesture amounts to 0.3 percent or so of their revenue for a single year, after ripping us off for 14 years.

Galen Weston, Loblaws billionaire owner, hasn't bothered to make a similar gesture for Weston Bakeries, which he also owns, and while information isn't available at this time on exactly how much the public was fleeced for, it's clear this effort to avoid public ire is a drop in the bucket of what was stolen to begin with.

It will, of course, be interesting to see how this story develops and what sort of consequences might result from gouging pretty much an entire country on one of the most fundamental staples of life for many, but I will bet good money right now that nothing remotely proportional or appropriate will take place.

When billionaires hurt poor families, none of them ever pay a meaningful cost. Not once. No executive will see the inside of a prison cell, no fine will come remotely close to the windfall that they made by shafting the public to begin with, and no significant changes will be made to avoid this sort of thing happening again. That's the world we live in today.

If you personally as an individual commit theft or another serious crime, you can expect the heavy hand of the law to come down on you with a resounding thump, but no corporation ever pays a meaningful price for criminal activity.

If you do decide to claim a Loblaws "gift" card, please consider giving it to a food bank. And then maybe ask yourself why in one of the wealthiest nations on Earth we still need food banks which inadequately meet the needs of the poor while ill gotten fat corporate profits stockpile in offshore tax havens.

Writer Michael Nabert has been a dedicated environmentalist for three decades, won an environmentalist of the year award for it, and reached an audience of millions online. He has recently brought his expertise to Environment Hamilton's new Climate Change team.


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