A federal judge has found that Coles, Australia’s second-largest supermarket chain, engaged in misleading conduct by increasing the prices of numerous household products and then promoting discounts that overstated the earlier price.
The Australian Competition and Consumer Commission instituted the case in 2024, at the same time it pursued a similar action against Coles’ larger rival, Woolworths. The ACCC’s litigation targets price representations made amid a period of heightened public scrutiny of supermarket shelf prices and inflationary pressure.
The legal action against Coles covered approximately 245 items that the supermarket advertised as being on discount between February 2022 and May 2023. During a trial earlier this year the court examined a sample of 14 products that had been included in Coles’ routine promotion known as 'down down'.
Federal Court Justice Michael O’Bryan concluded that Coles had raised prices in a manner that was commercially justifiable in light of rising supplier costs, but the timing of its promotional discounts meant the price reductions did not reflect genuine savings to consumers. In a livestreamed hearing Justice O’Bryan said the 'down down' ticket would not have been misleading if the products had been sold at the 'was' price for a minimum of 12 weeks.
On 13 of the 14 products scrutinised at trial, the judge found the promotions to be misleading because the products had not been offered at the stated 'was' price for a reasonable period. As a result, he said, the discounts advertised on the 'down down' tickets were not genuine.
The ACCC and Coles were not immediately available for comment following the ruling. The judge also noted that the ACCC’s lawsuit was heard alongside a class-action suit making similar claims.
A case management hearing to discuss the next procedural steps was set for June 10. The court’s findings focus on the presentation and timing of promotional pricing rather than on the underlying reasons for Coles’ price adjustments, which were acknowledged by the judge to be commercially justified in the context of supplier cost increases.
The judgment highlights the court’s view that for a promotional price claim to be genuine the prior price cited must have been in place for a reasonable duration - the judge specifying a minimum of 12 weeks in this matter - and that failing to meet that standard can render advertised discounts misleading.
Sections:
- Case background and scope
- Findings on the 14-item sample and the 'down down' promotion
- Next steps in litigation