The ACCC has taken Coles and Woolworths to court for allegedly misleading consumers through discount pricing claims.
The consumer watchdog is alleging the two supermarkets offered “illusory” discounts on hundreds of common supermarket products, by inflating the price of products by at least 15 per cent for brief periods before placing them in their ‘Prices Dropped’ and ‘Down Down’ promotions at prices higher than the pre-inflation price.
Gina Cass-Gottlieb, Chair of the ACCC, said 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.
“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.
“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.”
In one example from the ACCC, it looked at the price of the Oreo Family Pack Original 370g product which Woolworths offered for sale at a regular price of $3.50 for at least 696 days.
On 28 November 2022, the price was increased to $5.00 for a period of 22 days. On 20 December 2022, the product was placed on a ‘Prices Dropped’ promotion with the tickets showing a ‘Prices Dropped’ price of $4.50 and a ‘was’ price of $5.00.
Woolworths Group has said it will review the claims made by the ACCC and will continue to engage with the consumer watchdog on the matter.
Coles intends to defend the proceedings and stated that the allegations relate to a period of significant cost inflation when it was receiving a large number of cost price increases from its suppliers, while its own costs were rising, leading to an increase in the retail price of many products.
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