Promotions at Australian retailer Coles broke consumer law, the country’s federal court has ruled after a legal challenge brought by the nation’s competition regulator.
In its judgment delivered today (14 May), the court found Coles Supermarkets Australia made false or misleading representations about discounts under its Down Down promotional programme.
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The case centred on 245 common household products sold by Coles between February 2022 and May 2023.
According to the Australian Competition and Consumer Commission (ACCC), Coles temporarily hiked the prices of the products by at least 15% before placing them on a Down Down promotion at prices that were “still higher than, or the same as, the price it had previously sold for before the price increase”. The watchdog argued the markdowns violated Australian consumer law.
The Down Down campaign, introduced in June 2010, became the subject of scrutiny after the ACCC initiated proceedings against Coles in September 2024.
A liability hearing involved an agreed list of 12 sample products from the total of 245. Two of these products were placed on the Down Down program twice.
This court found Coles making “misleading” representations in 13 of the 14 Down Down tickets that were considered in the liability hearing.
Welcoming the verdict, ACCC chair Gina Cass-Gottlieb said: “The ACCC brought this case in the public interest because we considered that Coles’ pricing practices within its Down Down programme made it harder for customers to identify genuine value for money while shopping for household essentials.”
Penalties and other orders sought by the competition watchdog will be decided at a “later date”.
Coles, the second-largest supermarket chain in Australia operating more than 840 stores nationally, said: “The court found that all price increases resulted from supplier cost price increases and were, therefore, commercially justifiable.
“However, the court found that, after a cost price increase, a minimum price establishment period of 12 weeks was required before promoting products on its Down Down programme. As a result, the court found the Down Down tickets were misleading. Coles is reviewing the judgement.”
Woolworths, Australia’s largest supermarket chain, is facing ACCC court action over its own Prices Dropped promotion.
