Coles Group misled shoppers through its Down Down pricing program, the Federal Court has found, in a ruling that upholds allegations brought by the Australian Competition and Consumer Commission.
Federal Court Justice Michael O’Bryan delivered the judgment in Melbourne on Thursday, finding Coles advertised discounts based on higher prices that had only been in place for short periods.
The ACCC alleged Coles temporarily increased prices on products before promoting reduced prices under its Down Down campaign, despite the promoted prices sometimes being higher than prices charged weeks earlier.
Coles argued the price increases reflected supplier-driven inflationary pressures and that the discounts were genuine.
A separate case against Woolworths Group is still before the court.
Court finds discounts misleading
Justice O’Bryan said Coles increased prices in a “commercially justifiable manner” and accepted evidence that suppliers had sought price rises.
“Coles increased the prices in a commercially justifiable manner,” O’Bryan said in a summary of his judgment.
He also found the products were sold in commercially normal volumes.
However, the court found the higher prices were not maintained for long enough before the discounts were advertised.
O’Bryan said products would generally need to remain at the higher price for 12 weeks before consumers could reasonably regard a later discount as genuine. In most cases examined by the court, products remained at the higher price for around four weeks.
The court found Coles engaged in misleading or deceptive conduct.
ACCC responds
The ACCC launched proceedings against Coles and Woolworths in late 2024 amid broader scrutiny of supermarket pricing and cost-of-living pressures.
“We welcome the Court’s finding that Coles breached the Australian Consumer Law,” 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’ program made it harder for customers to identify genuine value for money while shopping for household essentials.
“We had received complaints from consumers about the ‘Down Down’ discounting claims made by Coles. We understand how important it is for consumers to get value for their supermarket purchases, and decided to take action to test the discounting practices in Court,” Ms Cass-Gottlieb said.
“This case has increased transparency and accountability in relation to Coles’ Down Down program.”