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‘Households could claim between $2,000 and $5,000’: Coles and Woolies face class action

Coles and Woolworths are facing two costly class action suits as law firms circle the supermarket giants.

Carter Capner Law and GMP Law are both investigating potential class action suits against Coles and Woolworths for breaking Australian consumer law, following news that ACCC has launched legal action against the supermarket giants.

UPDATE: ‘It’s certainly going to happen’: We speak to the lawyer leading Coles and Woolworths class action

“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, telling Yahoo! his firm was hit with an “avalanche of calls from outraged customers” after he spoke to the media about the issue.

The ACCC commenced separate proceedings in the Federal Court against Woolworths and Coles last month, alleging each supermarket made misleading claims about product discounts.

“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,” ACCC Chair Gina Cass-Gottlieb said.

“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.”

In total, this see-saw pricing occurred with 266 Woolworths products at different times across 20 months, and 245 products from Coles over 15 months.

“The evidence the ACCC has collected would be useful, but the claim relies on their breaches of the Australian Consumer Law sections 18 (misleading/deceptive conduct), 20, 21 (unconscionable conduct) and 29 (misleading representation re price of goods),” Carter said.

GMP Law is also investigating a potential class action suit.

“Consumers have the right to receive honest and transparent information about the products they purchase,” chairman of GMP Law, Gerard Malouf said.

“This investigation is an important step towards protecting those rights and ensuring that businesses adhere to fair trading practices.”

Should Carter’s estimates of claims of up to $5,000 per household, a class action could prove costly.

The ACCC alleged that the supermarkets “sold tens of millions of the affected products and derived significant revenue from those sales”.

Despite the monetary cost, the reputational damage is likely to linger, as crisis communications expert Sally Branson told Mumbrella last month.

“In the past, it has been a stretch for everyday shoppers to connect the cost of their weekly grocery shop to the complex mechanisms at play within large corporations like Coles and Woolworths,” she told Mumbrella.

“What, though, could be more un-Australian than ripping us off with Tim Tams? When your whole brand is built on a carefully crafted national image, there comes a tipping point when consumers have had enough.

“All brands have a tipping point, and the big supermarkets could be dangerously close to it. Could it be the toothpaste that does it?”

Mumbrella has contacted Coles and Woolworths for comment.

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