Woolworths and Coles have been accused of misleading customers into thinking they were getting discounts on everyday groceries, according to new court documents. Items like pet food, fly spray, tampons, and even infant formula were marketed with discounts as high as 39%. However, the discounts were often not real, and some products were still sold at prices up to 29% higher than their usual rates, despite being advertised as “on sale.”
The Australian Competition and Consumer Commission (ACCC) filed the case with the Federal Court, revealing what it described as a pattern of deceptive discounting practices across a wide range of products in both supermarkets. Pet food, Coca-Cola, Oreo biscuits, and fly spray were just some of the items affected. For example, Woolworths was selling Raid mosquito spray at a price that was 39% higher than the regular price, despite promoting it as a discounted item. Similarly, Lucky Dog pet food and Coca-Cola were advertised at prices 33% and 28% higher, respectively, than what shoppers had previously paid.
The ACCC’s detailed investigation alleges that both supermarkets raised their regular shelf prices and later offered minimal “discounts,” which were still more expensive than the typical prices from previous years. This practice tricked shoppers into believing they were getting a bargain, when in fact, they were paying more.
The court documents highlight over 250 everyday grocery items affected by these misleading discount practices, including dairy, snacks, cleaning products, and soft drinks. This legal action follows months of consumer complaints, social media investigations, and data analysis by the ACCC.
One example of this deceptive pricing strategy was a two-litre bottle of Sprite at Coles. For a year, it was sold for $2.35. Then, Coles raised the price to $4.40 for a short period before offering a so-called “discount” of $3. However, this new price was still a 33% increase from the original price. Similarly, Woolworths applied a 34% price hike to the same product and then promoted it as a discounted item.
Other products, like Robert Timms coffee and toothpaste, were also part of the alleged scam. Coles marked up prices and then reduced them slightly under their “Down Down” promotion, giving the false impression of savings.
The ACCC launched its case against both supermarket giants in late September, accusing them of breaching Australian Consumer Law by making misleading discount claims. The case alleges that both Coles and Woolworths had long-term prices for products that stayed consistent for at least six months, if not longer. After a temporary price spike, they would promote the items as being on sale, when in reality, the prices were still higher than before the spike.
Between September 2021 and May 2023, Woolworths allegedly used this tactic on 266 products, while Coles did the same with 245 items between February 2022 and May 2023. If found guilty, each supermarket could face penalties of up to $50 million or 30% of their adjusted revenue for the period in question.
The ACCC made it clear that they are not accusing the two companies of colluding to raise prices together. However, the case has brought significant public and political attention to the pricing practices of Australia’s largest supermarkets.
In response, both Woolworths and Coles have said they are reviewing the ACCC’s claims. Woolworths promised to cooperate with the ACCC, while Coles stated it would defend the allegations in court.
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