The Australian Competition and Consumer Commission (ACCC) has launched new lawsuits against Coles and Woolworths over allegedly misleading consumers through discount pricing on hundreds of products.
The ACCC alleges both companies sold their goods at the regular price for 12 months before raising the price by over 15 percent for a long period of time. They then dropped the prices back down to the original price or slightly higher and put them in their “down down” and “prices dropped” promotions.
The consumer watchdog has launched separate proceedings against the two supermarkets. Over a 20-month period the ACCC alleges 266 products were involved at Woolworths, whilst over a 15-month period they allege 245 products were used in Coles’ promotions.
“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,” ACCC Chair Gina Cass-Gottlieb said. “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.”
The ACCC identified this through observing social media promotions and through consumer contacts before deepening into an investigation using its compulsory powers. This means they are allowed to obtain information, documents and evidence in relation to its enforcement functions under the Competition and Consumer Act 2010.
The maximum penalty for the breach of the Australian Consumer Law changed November 2022, which was part way through the investigation. For breaches past the change the maximum penalty includes a fine $50 million, however if the court can determine the value of the ‘reasonably attributable’ benefit obtained, the fine triples. If the court can’t determine the value of the ‘reasonably attributable’ benefit, the companies are fined 30 percent of their adjusted turnover during the period which the breaches were made.
The Consumer watchdog alleges that the two companies sold tens of millions of the affected products and gained significant revenue from the sales.
The ACCC has taken legal action against other companies for breaching consumer law in the past. Last year they sued Qantas for selling seats on flights that had already been cancelled. The outcome saw the airline company pay roughly $20 million in repayments to those affected.
Photo: Outside view of complete Coles and Aldi precinct in Karingal Hub by Karingal Hub is available HERE and is used under a Creative Commons Licence. This image has not been modified.
