Australia's federal court has ruled that supermarket giant Coles misled consumers with its "Down Down" promotions, finding that advertised discounts were "not genuine." The Australian Competition and Consumer Commission (ACCC) had sued Coles, alleging the company temporarily raised prices before advertising sales on hundreds of products.
Justice Michael O'Bryan, who is also overseeing a similar case against competitor Woolworths, agreed with the ACCC's claims. Coles, which had denied the allegations, stated it was reviewing the judgment and that its priority "has always been … delivering value to our customers."
The ACCC's lawsuit focused on 245 products, including items like toothpaste and biscuits, which Coles allegedly misled customers about over a 15-month period from February 2022 to May 2023. The watchdog presented evidence on 14 sample products and their pricing.
Justice O'Bryan ruled that for 13 of these sample products, the advertised discounts did not represent a genuine saving for consumers. He wrote that for a discount to be considered genuine, the product must have been sold at the higher "Was" price for a minimum of 12 weeks immediately before the promotion began. This minimum period was not met for the majority of the products in question.
An exception was made for Nature's Gift Dog Food, the fourteenth product in the sample. The judge ruled this promotion was not misleading because the ticket did not display a "was" price, thus not creating a false comparison for consumers.
Coles and Woolworths together control approximately two-thirds of the Australian grocery market. Both companies have faced increased scrutiny in the past year concerning allegations of price gouging and anti-competitive behavior. The ACCC has been actively investigating these practices.
The ACCC has also filed a similar case against Woolworths, alleging that the supermarket misled customers on 266 products over a 20-month period. A decision in that case is anticipated later this year.
Coles commented on the ruling, stating that the case "highlighted the need for clear, practical guidance on minimum price establishment periods to ensure the retail industry can avoid unnecessary litigation in future." Any penalties Coles may face will be determined in subsequent hearings, with the court indicating they are likely to be significant.
