Regulator Sues Supermarket Giants for ‘Illusory’ Discounts on 500 Products

The Australian Competition and Consumer Commission (ACCC) has taken Australia’s two biggest supermarkets to court for misleading consumers.
Woolworths Group Limited and Coles Supermarkets are accused of breaching Australian Consumer Law by making misleading “discount pricing” claims on hundreds of common supermarket products.
According to the ACCC, select products saw price increases of at least 15 percent over some time, before being included in Woolworths’ “Prices Dropped”’ promotion and Coles’ “Down Down” promotion.
These new prices did not result in significant savings for customers.
“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,” said Cass-Gottlieb.
“We allege that Woolworths and Coles breached Australian Consumer Law by making misleading claims about discounts, when the discounts were, in fact, illusory,” Cass-Gottlieb added.
The ACCC further alleges that, in many cases, both supermarkets had already planned to place the products on promotion before the price spike.
The regulator identified 266 Woolworths products across 20 months, and 245 Coles products over 15 months, via consumer complaints and social media monitoring.
“We will continue to engage with the ACCC on the matter. Our prices dropped program was introduced to provide our customers with great everyday value on their favourite products, and we remain committed to offering many ways for customers to save at the checkout,” said the statement issued by Woolworths.
Meanwhile, Coles said it took compliance with Australian Consumer Law seriously and emphasised building trust with all stakeholders, especially customers.
Simultaneously with the ACCC’s court action against Coles and Woolworths, the government has released a draft for a new mandatory Food and Grocery Code, which will apply to major supermarkets and impose multi-million-dollar fines for non-compliance.
Affected products include Arnott’s Shapes biscuits, Band-Aids, Bega cheese, Cadbury chocolates, Coca Cola soft drink, Colgate toothpaste, Danone yoghurt, Dettol multi-purpose wipes, Fab laundry liquid, Karicare formula, Kellogg’s snack bars, Kleenex tissues, Libra tampons, Lurpak butter, Maggi two-minute noodles, Nature’s Gift dog food, Nescafe instant coffee, Palmolive shampoo, Rexona deodorant, Sakata rice crackers, Sanitarium Weet-Bix cereal, Strepsils lozenges, Sunrice rice, Tena pads, Viva paper towels, Whiskas cat food, and Zafarelli pasta.