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Loblaw parent George Weston books C$39 million in bread pricing compensation

Canadian food distributor George Weston Ltd. distributed C$39 million in gift cards to customers during its fiscal fourth quarter after the company and its grocery subsidiary admitted to roles in an alleged scheme to fix the price of bread.

The charge weighed on Weston's profit by 30 Canadian cents per share, the company said in a summary of its financial results released March 2. The Toronto-based company is the parent of Loblaw Cos. Ltd., which operates a chain of grocery stores across Canada.

In January, Loblaw said it would offer customers a C$25 gift card after it found that it overcharged customers for certain packaged bread products.

In its results, Weston also said class action lawsuits against it, Loblaw, another bread wholesaler and other grocers concerning the alleged scheme will not "have a material adverse impact on their financial conditions or prospects."

In December, both Loblaw and Weston acknowledged that some of their employees played a role in an alleged scheme to fix the prices of packaged bread products between 2001 and 2015. The companies reported the scheme to the Canadian Competition Bureau in March 2015, which has since been investigating the alleged scheme.