Australian court says Coles misled shoppers with discount claims

An Australian federal court ruled Thursday that supermarket chain Coles misled shoppers through its “Down Down” promotional campaign, finding some “was/is” price comparisons suggested discounts that were not genuinely established.

Justice Michael O’Bryan said Coles contravened consumer law by presenting products as discounted when their original “was” prices had not been in place for a sufficient period before the promotion.

The case was brought by the Australian Competition and Consumer Commission (ACCC). Penalties have not yet been set, with possible fines that could reach tens of millions of dollars.

How the “was” price rules changed

The court heard that Coles used internal business rules, described as “guardrails,” designed to ensure that a non-promotional “was” price was established for an extended period before a product could be promoted with a “Down Down” ticket.

In late 2021 and early 2022, Coles altered those guardrails. The court found the chain reduced the period a product needed to be sold at the “was” price from 12 weeks to as little as four weeks.

According to the judgment, the change was influenced by supplier price increase requests during an inflationary period and what Coles viewed as competitive pressure from rival Woolworths, which was using a shortened timeframe for similar promotions.

Court findings and what comes next

Justice O’Bryan said the “Down Down” tickets for sample products would not have been misleading if the products had been sold at the “was” price for a minimum of 12 weeks immediately preceding the “Down Down” promotion.

The ruling focuses on a practice known as “was/is” comparative pricing, which is widely used in retail to show a current price alongside a higher previous price. Regulators have argued the tactic can mislead shoppers when the earlier price is not a genuine reference point.

Coles said it was reviewing the judgment. The ACCC’s separate case against Woolworths is still awaiting a court decision.

Next steps will include court proceedings on penalties and any orders that may follow, as scrutiny of supermarket pricing and discount practices continues in Australia.