The Australian Competition and Consumer Commission (ACCC) has initiated legal action against supermarket giants Woolworths and Coles, accusing them of misleading consumers with their “Prices Dropped” and “Down Down” pricing campaigns.
It is alleged that the promotions did not reflect genuine discounts as the products were sold at their regular prices for extended periods before the promotions.
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The ACCC claims that Woolworths and Coles engaged in deceptive conduct by temporarily increasing the prices of certain products by at least 15% before including them in their discount promotions.
This price manipulation created the illusion of a discount when the promotional prices were higher than or equal to the original prices.
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 […] 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.”
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By GlobalData“We also allege that in many cases both Woolworths and Coles had already planned to later place the products on a ‘Prices Dropped’ or ‘Down Down’ promotion before the price spike, and implemented the temporary price spike for the purpose of establishing a higher ‘was’ price.”
The ACCC’s investigation, spurred by consumer complaints and social media monitoring, reveals that Woolworths and Coles allegedly planned the misleading promotions in advance.
The proceedings involve 266 products from Woolworths between September 2021 and May 2023, and 245 products from Coles between February 2022 and May 2023.
The ACCC alleges that the supermarkets profited significantly from these practices, selling tens of millions of the products concerned.
In addition to seeking legal penalties, the ACCC is requesting that Woolworths and Coles support community service by funding a charity to deliver meals to Australians in need.
This would be in addition to their existing charitable programmes.
In January 2024, the Albanese government tasked the ACCC with conducting a comprehensive inquiry into supermarket pricing and competition.
