Supermarket Giant Coles Accused of Misleading Pricing Tactics in Federal Court Case
The Australian Competition and Consumer Commission has launched legal proceedings against supermarket chain Coles, alleging the company engaged in deceptive pricing practices through its well-known 'down down, prices are down' marketing campaign. The Federal Court hearing commenced this week with ACCC lawyers presenting evidence they claim demonstrates systematic consumer deception.
'Utterly Misleading' Campaign Under Scrutiny
ACCC barrister Garry Rich SC told the court that Coles had employed "utterly misleading" pricing strategies, specifically criticizing the company's promotional mechanics. "Why on earth are you telling your customers that your prices are going down, when they're not?" Rich questioned during his opening statement. He emphasized that the campaign's jingle had become embedded in public consciousness, describing it as "sticking in one's ear longer than is healthy."
The commission's case focuses on allegations that Coles artificially increased prices on numerous products before subsequently reducing them and marketing these reductions as genuine discounts. Rich argued this approach represented "an utterly inappropriate promotional mechanic" given internal knowledge within Coles that prices were actually increasing rather than decreasing.
Specific Product Examples Revealed in Court
During proceedings, the ACCC presented detailed examples of the alleged pricing manipulation. One prominent case involved Nature's Gift adult wet dog food in a 1.2kg can. According to commission evidence, this product maintained a consistent price of $4 from April 2022 through February 2023 before Coles allegedly increased the price to $6 for one week, then offered it at a "reduced" price of $4.50.
"Coles had increased its price to $6 just seven days before the promotion and for 296 days before that the price was $4," Rich stated, adding that this created a "utterly misleading" impression of genuine price reduction for consumers.
Judicial Scrutiny and Company Response
Justice Michael O'Bryan questioned whether supplier cost increases might explain the price changes, but Rich countered that consumers would not have access to this information and that marketing the subsequent price as discounted remained misleading regardless of supply chain factors.
The 'down down' campaign, recognizable by its giant red thumb imagery, launched in 2010 with claims of reducing and maintaining low prices on everyday household items. Coles had positioned the initiative as part of its commitment to helping Australians manage grocery expenses amid cost-of-living pressures.
Broad Pattern of Alleged Deception
Beyond the dog food example, the ACCC alleges Coles employed similar tactics across 245 different products spanning multiple categories. The commission's evidence includes items ranging from toothpaste and soft drinks to cheese, shampoo, band-aids, and laundry powder.
"You're not lowering the cost of living, you're not driving prices down, in circumstances of the kind we have here," Rich asserted, challenging Coles's public positioning of the campaign as consumer-friendly price reduction.
Coles has formally denied all allegations brought by the consumer watchdog and is contesting the case as the Federal Court hearing continues. The supermarket chain maintains its pricing practices have been appropriate and transparent, setting the stage for continued legal examination of one of Australia's most recognizable retail marketing campaigns.
