Ask Onix
Court finds Coles misled consumers with 'Down Down' promotions
Australia's Federal Court has ruled that supermarket chain Coles deceived customers by advertising false discounts on hundreds of products, a decision that could lead to substantial penalties. The case, brought by the Australian Competition and Consumer Commission (ACCC), centered on the retailer's 'Down Down' promotions, which the court found did not represent genuine savings.
Key findings in the ruling
Justice Michael O'Bryan, who is also overseeing a similar case against rival supermarket Woolworths, determined that Coles had temporarily inflated prices before applying the discounts. The court examined 14 sample products and concluded that 13 of them did not offer real savings, misleading ordinary consumers.
The judge stated that for a discount to be considered legitimate, products must have been sold at the higher 'Was' price for at least 12 weeks prior to the promotion. Only one product, Nature's Gift Dog Food, was exempted because its ticket did not display a 'Was' price.
ACCC's allegations and Coles' response
The ACCC accused Coles of misleading customers on 245 products, including everyday items like toothpaste and biscuits, over a 15-month period from February 2022 to May 2023. In a statement following the ruling, Coles said it was reviewing the judgment and reiterated its commitment to delivering value to customers.
"Our priority has always been, and will continue to be, delivering value to our customers."
Coles spokesperson
The company also emphasized the need for clearer guidelines on minimum price establishment periods to prevent future legal disputes in the retail sector.
Broader scrutiny of supermarket pricing
Coles and Woolworths, which together control two-thirds of Australia's grocery market, have faced growing criticism over pricing practices and alleged anti-competitive behavior. The ACCC has also filed a separate lawsuit against Woolworths, accusing it of misleading customers on 266 products over 20 months. A ruling in that case is expected later this year.
Next steps and potential penalties
The court will hold additional hearings to determine the financial penalties for Coles, which are expected to be significant. The case underscores the regulatory pressure on major retailers to ensure transparency in pricing and promotions.
