What was the total net liability for Bimbo Foods Bakeries Distribution in 2024?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
663 |
As of December 31, 2024, the cumulative amount corresponding to tax, civil and labor lawsuits deemed as less than probable, but more than remote by the Company's internal attorneys is $399. However, the Company considers that such lawsuits will not have a material effect on its consolidated financial position or operating results.
Brazil:
As a result of the purchase of property, plant and equipment and intangible assets in Brazil in connection with the Firenze brand in 2008, the Company was subject to tax liens as the presumed successor to companies that participate in these actions. On January 7, 2021, the Company signed an agreement with the corresponding authorities related to the above process, which implies payments during 7 years following the signing of said agreement with the option to settle in advance at any time. As a consequence of the above, as of April 29, 2022, in advance the Company paid the total debit $310.
In addition, the Company has secured its labor and civil lawsuits with security deposits totaling $121, which are presented as part of other non-current assets.
Canada:
The Competition Bureau of Canada in 2017 started an investigation into alleged collusion between various participants of the baked goods industry, including Canada Bread, although to date no formal accusations have been charged against the Company. The Company is cooperating with the Canadian authorities in this process.
On July 20, 2023, the subsidiary Canada Bread made the payment for 50 million CAD, which was fully provisioned, corresponding to the fine imposed by the Superior Court of Justice of Ontario related to the investigation opened by the authority in matters of economic competition in 2017.
In addition, Grupo Bimbo and Canada Bread have been required in two class actions in connection with such investigation. Given the status of this legal process as of December 31, 2024, the Company has not recognized a provision related to this matter.
The Company filed a complaint with the Canadian authorities against Maple Leaf Foods Inc.
Source: Item 14 — Other Accounts Payable and Accrued Liabilities (FDD pages 312–476)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Bimbo Foods Bakeries Distribution provides some details regarding potential liabilities as of December 31, 2024. It mentions that the cumulative amount corresponding to tax, civil, and labor lawsuits deemed as less than probable, but more than remote, is $399. However, Bimbo Foods Bakeries Distribution considers that these lawsuits will not have a material effect on its consolidated financial position or operating results. This suggests that while there are ongoing legal matters, the company does not anticipate significant financial repercussions from them.
Additionally, in Brazil, the company made an advance payment of $310 related to tax liens resulting from the purchase of property, plant, and equipment in 2008. Bimbo Foods Bakeries Distribution also has security deposits totaling $121 to cover labor and civil lawsuits, which are presented as part of other non-current assets.
In Canada, the Competition Bureau of Canada started an investigation in 2017 into alleged collusion within the baked goods industry, including Canada Bread, a subsidiary of Bimbo Foods Bakeries Distribution. As of December 31, 2024, no provision has been recognized related to this matter, indicating that the company does not believe a liability is probable at this time. However, on July 20, 2023, Canada Bread paid 50 million CAD (Canadian dollars), which was fully provisioned, related to a fine imposed by the Superior Court of Justice of Ontario.
It is important to note that the FDD does not provide a single, consolidated figure for the total net liability of Bimbo Foods Bakeries Distribution as of December 31, 2024. Instead, it discloses various potential and actual liabilities related to specific legal and tax matters in different regions. A prospective franchisee should consult with a financial advisor to fully understand the implications of these liabilities.