The Australian Competition and Consumer Commission (ACCC) has launched legal action against supermarket giants Woolworths and Coles, accusing them of misleading consumers through their well-known discount pricing campaigns.
The ACCC alleges that both companies’ “Prices Dropped” and “Down Down” promotions falsely suggested a significant reduction in prices, when in fact the promotions often did not reflect actual price trends.
According to the ACCC, Woolworths and Coles increased the prices of certain products for brief periods, only to later promote them at prices that were higher or similar to the original regular price.
The promotions, the ACCC claims, created the illusion of discounts when, in reality, the advertised reductions were either non-existent or minimal.
The ACCC’s case focuses on 266 products at Woolworths over a span of 20 months, and 245 products at Coles over a 15-month period.
ACCC Chair Gina Cass-Gottlieb said, “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.
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 products involved include household staples such as Arnott’s Tim Tams, Kellogg’s cereal, and Listerine mouthwash.
The ACCC claims these items were sold at stable prices for at least six months, in some cases over a year, before the price was raised by at least 15% for a short period.
Following this brief increase, the products were placed in Woolworths’ “Prices Dropped” or Coles’ “Down Down” promotions, but at prices that were often higher than their original regular prices.
Ms Cass-Gottlieb also stated that the alleged conduct by the two companies diminished consumers’ ability to make informed decisions, especially during times of increased cost-of-living pressures.
“Many consumers rely on discounts to help their grocery budgets stretch further…
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 one example, Woolworths reportedly offered the Oreo Family Pack Original 370g product at $3.50 for nearly two years.
The price was then increased to $5.00 for 22 days, before being reduced to $4.50 under the “Prices Dropped” promotion—a price 29% higher than the original regular price.
Similarly, Coles allegedly used the same tactics for its Strepsils Throat Lozenges.
Priced at $5.50 for over 600 days, the lozenges saw a brief spike to $7.00 before being “discounted” to $6.00 under the “Down Down” promotion—9% higher than the original regular price.
The ACCC claims it identified this conduct through a combination of consumer complaints and social media monitoring, leading to a comprehensive investigation.
As part of the proceedings, the ACCC is seeking penalties, declarations, and other orders, including the possibility that both companies fund charitable meal programs for Australians in need.
Should Woolworths and Coles be found guilty of these allegations, the ACCC is expected to pursue significant penalties.
The outcome of these legal proceedings could have a lasting impact on how Australian supermarkets market their discounts, as the ACCC continues to prioritise transparency in pricing during a time of financial hardship for many consumers.
