Australia’s two leading supermarkets are being taken to court by the Australian Competition and Consumer Commission (ACCC) over misleading discount pricing on more than 500 products.
ACCC Chair Gina Cass-Gottlieb said separate proceedings had commenced in the Federal Court against Woolworths and Coles for allegedly breaching the Australian Consumer Law by misleading consumers through discount pricing claims.
Ms Cass-Gottlieb said the ACCC allegations related to products sold by Woolworths and Coles at regular long-term prices which remained mostly the same, for at least six months and in many cases for at least a year.
She said the products were then subject to price rises of at least 15 percent for brief periods, before being placed in Woolworths’ ‘Prices Dropped’ and Coles’ ‘Down Down’ promotions, at prices lower than during the price spike, but higher than, or the same as, the regular price that applied before the price spike.
“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,” Ms 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.”
Ms Cass-Gottlieb said the ACCC alleged the conduct involved 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months.
She said the representations were made on pricing tickets displayed to consumers in-store on supermarket shelves and online, usually with a ‘was’ price displayed showing what the price was during the short-term price spike and the date of that price.
“Many consumers rely on discounts to help their grocery budgets stretch further, particularly during this time of cost of living pressures. It is critical that Australian consumers are able to rely on the accuracy of pricing and discount claims,” Ms Cass-Gottlieb said.
She said the ACCC estimates that Woolworths and Coles sold tens of millions of the affected products and derived significant revenue from those sales.
“The ACCC is seeking declarations, penalties, costs and other orders. The ACCC is also seeking community service orders that Woolworths and Coles must each fund a registered charity to deliver meals to Australians in need, in addition to their pre-existing charitable meal delivery programs.”
