The ACCC has launched legal action in the Federal Court against Woolworths Group Limited (Woolworths) and Coles Supermarkets Australia Pty Ltd (Coles) for allegedly misleading consumers through deceptive discount pricing on hundreds of everyday products.
The Australian Competition and Consumer Commission (ACCC) claims that Woolworths and Coles inflated the prices of certain items for brief periods before advertising them in promotions such as Woolworths’ “Prices Dropped” and Coles’ “Down Down.” Although the prices in these promotions were lower than the artificially inflated ones, they were still equal to or higher than the regular long-term prices these products were sold at before the price hike.
According to ACCC Chair Gina Cass-Gottlieb, “For years, Australians have trusted that the ‘Prices Dropped’ and ‘Down Down’ campaigns signal a real, lasting reduction in prices. But in these cases, we allege the promotional prices were either the same or higher than the previous regular prices, misleading consumers into thinking they were getting a better deal.”
The ACCC argues that Woolworths and Coles violated Australian Consumer Law by presenting illusory discounts, deceiving shoppers who believed they were saving money. Furthermore, the ACCC claims that both supermarkets planned these promotional price cuts in advance and temporarily spiked the prices to create a false “was” price, making the promotions appear more generous than they actually were.
The conduct allegedly involved 266 products from Woolworths over a 20-month period and 245 products from Coles over 15 months. Pricing tickets displayed both in stores and online showcased the false “was” prices from the short-term increases, tricking shoppers into believing they were getting a discount.
The ACCC’s investigation was prompted by consumer complaints and social media monitoring, leading to a deeper probe using their compulsory powers. Cass-Gottlieb highlighted that, with rising living costs, many Australians rely on discounts to manage their grocery budgets. She emphasised the importance of accuracy in pricing and discount claims, stating, “Misleading promotions undermine consumers’ ability to make informed choices.”
The ACCC estimates Woolworths and Coles sold tens of millions of these products, generating significant revenue from the misleading campaigns. The regulator is seeking court declarations, penalties, and community service orders requiring both supermarkets to fund meal delivery services to Australians in need.
The ACCC claims Woolworths and Coles maintained regular prices on certain products for at least six months. After increasing prices by 15% or more for a short period, they placed the items in their discount promotions. The ACCC alleges these promotional prices were either the same or higher than the original regular prices, misleading shoppers.
Between September 2021 and May 2023, Woolworths allegedly misled customers on 266 products, including popular items like Tim Tams, Dolmio sauces, and Moccona coffee. For example, the price of Oreo Family Pack Original 370g increased from $3.50 to $5.00 for 22 days, before being offered at a “Prices Dropped” rate of $4.50. This promotional price was 29% higher than the original $3.50.
The ACCC argues that Woolworths intentionally created the temporary price spike to justify a higher “was” price, deceiving consumers into thinking they were saving money.
Similarly, Coles is accused of misleading consumers between February 2022 and May 2023 on 245 products, including well-known brands like Bega cheese, Coca-Cola, and Rexona deodorant. An example involves Strepsils Throat Lozenges Honey & Lemon 16 pack, which saw a price increase from $5.50 to $7.00 for 28 days. The product was then placed on a “Down Down” promotion at $6.00, which was 9% higher than the original price.
As with Woolworths, the ACCC alleges Coles raised prices temporarily to establish a higher “was” price before placing the product back on promotion.
The ACCC is now seeking penalties and remedies, aiming to hold both Woolworths and Coles accountable for deceiving consumers with their misleading discount practices.
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