Australia: Australia’s two largest supermarket chains, Coles and Woolworths, have been facing legal action by the Australian Competition and Consumer Commission (ACCC) for allegedly misleading consumers with false claims of permanently lowered prices.
The ACCC has charged the grocery giants of raising prices temporarily, only to reduce them to a level that was either equivalent to or higher than the original price.
Both supermarkets, which captured two-thirds of the Australian grocery market, have denied wrongdoing. Coles has affirmed to defend itself against the claims, while Woolworths has said it will review the statements.
The controversy is rooted in the companies’ long-standing price promotion campaigns, including Coles’ “Down Down” and Woolworths’ “Prices Dropped” initiatives, which promised shoppers sustained discounts on a wide range of products. According to ACCC Chair Gina Cass-Gottlieb, the promotions were often “illusory,” deceiving customers about the true nature of the discounts. The watchdog’s investigation found that Woolworths misled consumers on 266 products over 20 months, while Coles did so with 245 items over 15 months.
The products involved in the case include a wide variety of household staples, such as pet food, toiletries, and Australian favourites like Arnott’s Tim Tam biscuits, Bega Cheese, and Kellogg’s cereal. The ACCC estimates that both companies sold tens of millions of the affected products, generating significant revenue in the process.
As Australians face mounting cost-of-living pressures, ACCC Chair Cass-Gottlieb emphasized the importance of accurate pricing. Cass-Gottlieb stated that, “Australian consumers must be able to rely on the accuracy of pricing and discount claims.”
Prime Minister Anthony Albanese also clarified the alleged conduct, describing it as “completely unacceptable” and inconsistent with Australian values. In a press conference, he introduced draft legislation for a mandatory supermarket code of conduct, aimed at curbing anti-competitive practices and ensuring fairness for both consumers and suppliers.
The ACCC is seeking substantial penalties in Federal Court and has called for the companies to enhance their charitable food programs. This lawsuit comes as part of a broader effort to reform the country’s Food and Grocery Code of Conduct, which could deliver stricter standards and heavier fines for violations in the future.
Both Coles and Woolworths have admitted rising costs but maintained that they are committed to delivering value to customers. Woolworths pledged to work closely with the ACCC to address concerns, while Coles stated that it gives importance to building trust with all stakeholders.
This case marks a significant challenge for the supermarket duopoly as scrutiny intensifies over their pricing strategies and overall market practices.
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