The Federal Court of Australia has ruled that supermarket giant Coles misled consumers by offering illusory discounts under its 'Down Down' price campaign, in a landmark case brought by the Australian Competition and Consumer Commission (ACCC).
Court's Findings
On Thursday morning, Justice Michael O'Bryan delivered his ruling, finding that Coles deliberately disguised price increases as discounts. The court examined 14 'Down Down' tickets and concluded that 13 of them were misleading because the products were not sold at the stated 'was' price for a reasonable period. 'As a consequence, the discount represented on the tickets was not genuine,' Justice O'Bryan said.
Potential Penalties
The decision could result in significant financial penalties for Coles, a company valued at approximately $28 billion. The ACCC has brought separate but similar cases against both Coles and Woolworths, Australia's two dominant supermarket chains. The Woolworths case is awaiting judgment.
How the Scheme Worked
Both cases alleged that the supermarkets misled consumers by temporarily increasing prices before lowering them to above the original price and marketing the difference as a discount. For instance, a can of Nature's Gift dog food was sold for $4 for nearly a year, then briefly increased to $6, and later offered under a 'Down Down' ticket for $4.50.
The ACCC identified hundreds of products in the Coles campaign and a similar 'Prices Dropped' initiative from Woolworths that followed the same formula. During separate hearings, lawyers for the supermarkets argued that price increases were due to inflationary pressures and that the discounts were genuine.
Arguments in Court
ACCC barrister Garry Rich SC argued that Coles was trying to avoid losing customers by disguising price increases as discounts. 'Why on earth are you telling your customers your prices are going down? They're not,' he told the court. In contrast, Coles barrister John Sheahan contended that 'ordinary, reasonable consumers' understood that prices generally trend upward due to inflation.
The ruling marks a significant victory for consumer rights and could have broader implications for retail pricing practices in Australia.
