Coles and Woolies to front Federal Court today for alleged discount scam
Supermarket giants Coles and Woolworths will front up to their first Federal Court hearing on Wednesday, after being accused of deceiving millions of Australian shoppers with fake discount specials across hundreds of items.
The ACCC filed suit against the supermarkets last month “for allegedly breaching the Australian Consumer Law by misleading consumers through discount pricing claims on hundreds of common supermarket products”.
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The consumer watchdog alleges the supermarkets misused their various promotional tags — Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ specials — to trick consumers into thinking they were saving money on hundreds of ordinary household items when they were actually paying inflated prices.
It’s alleged that the misconduct involved 266 products for Woolworths over 20 months, and 245 products for Coles over 15 months.
When bringing the case, ACCC chair, Gina Cass-Gottlieb, said: “Following many years of marketing campaigns by Woolworths and Coles, Australian consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions relate to a sustained reduction in the regular prices of supermarket products.
“However, in the case of these products, we allege the new ‘Prices Dropped’ and ‘Down Down’ promotional prices were actually higher than, or the same as, the previous regular price.
“We allege that each of Woolworths and Coles breached the Australian Consumer Law by making misleading claims about discounts, when the discounts were, in fact, illusory.”
The ACCC will allege in court the supermarkets “sold tens of millions of the affected products and derived significant revenue from those sales”.
Both Coles and Woolworths will defend the charges.
In a statement given to Mumbrella, Woolworths Group CEO, Amanda Bardwell, said: “Our Prices Dropped program was introduced to provide our customers with great everyday value on their favourite products.
“We remain committed to offering many ways for customers to save at the checkout, including thousands of weekly specials, everyday low prices on household essentials, a great value own brand range and through our Everyday Rewards program.”
Coles also told Mumbrella it intends to defend the proceedings.
“The allegations relate to a period of significant cost inflation when Coles was receiving a large number of cost price increases from our suppliers and, in addition, Coles’ own costs were rising, which led to an increase in the retail price of many products,” the statement reads.
“Coles sought to strike an appropriate balance between managing the impact of cost price increases on retail prices and offering value to customers through the recommencement of promotional activity as soon as possible after the establishment of the new non-promotional price.
“In line with our values, Coles takes compliance with the Australian Consumer Law extremely seriously, and places great emphasis on building trust with all stakeholders, especially our customers.
“Coles is acutely aware of the cost-of-living pressures affecting households and continually seeks to deliver value to our customers. We do this in a variety of ways including promotional campaigns, every day low prices, Coles Own Brand and Flybuys. The Down Down program is one type of promotional campaign involving a longer-term reduction in the retail price of a product, and has been important in delivering lower prices to our customers and driving volume for our suppliers for many years.”
Wednesday’s court appearance comes as two law firms mount potential class action suits against the two supermarkets.
“Early estimates suggest that households could claim between $2,000 and $5,000, depending on the amount spent and the impact of the deceptive pricing,” Carter Capner law director Peter Carter said, of the potential suit.
Chairman of GMP Law, Gerard Malouf said any investigation into the supermarkets “is an important step towards protecting those rights and ensuring that businesses adhere to fair trading practices”.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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