ACCC takes Coles and Woolies to court

The consumer watchdog is taking Coles and Woolworths to court for allegedly jacking up prices and then only marginally dropping them under their respective ‘Prices Dropped’ and ‘Down Down’ campaigns.

“We allege that each of Woolworths and Coles breached the Australian Consumer Law by making misleading claims about discounts, when the discounts were, in fact, illusory,” the ACCC boss says.

“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,” ACCC chair Gina Cass-Gottlieb said.

The ACCC alleges prices on some products rose at least 15 per cent for brief periods, before being placed in Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ promotion, at prices lower than during the price spike but higher than, or the same as, the regular price that applied before the price spike.

The ACCC alleges the conduct involved 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months.

The watchdog began investigating when consumers contacted the ACCC, then the agency tracked prices on social media, before running an in-depth investigation.

Many consumers were relying on discounts during this cost of living crunch, Ms Cass-Gottlieb said.

“It is critical that Australian consumers are able to rely on the accuracy of pricing and discount claims.”

“We allege these misleading claims about illusory discounts diminished the ability of consumers to make informed choices about what products to buy, and where.”

In court, the consumer watchdog will push for the supermarkets to pay penalties, costs, and will seek court-ordered declarations.

The ACCC will also ask the court to impose community service orders mandating the supermarkets each fund a registered charity to deliver meals to Australians in need, in addition to their pre-existing charitable meal delivery programs.

In a statement, Woolworths says it “will carefully review the claims made by the ACCC and will continue to engage with the ACCC on the matter”.

Newly-installed Woolworths Group chief executive Amanda Bardwell, said cost of living was a key issue for millions of Australians “who shop with us every week”.

“Our customers are telling us they want us to work even harder to deliver meaningful value to them and it’s important they can trust the value they see when shopping our stores,” Ms Bardwell said.

“Our Prices Dropped program was introduced to provide our customers with great everyday value on their favourite products.

“We remain committed to offering many ways for customers to save at the checkout, including thousands of weekly specials, everyday low prices on household essentials, a great value own brand range and through our Everyday Rewards program.”

NewsWire has contacted Coles for comment.

More to come