7 hours Ago By Varun Godinho
Two of the country’s largest supermarkets – Woolworths and Coles – which combined account for 67 per cent of supermarket retail sales nationally have fooled customers into buying everyday groceries by using fake discounts on products with misleading discounts as high as 39 per cent, new court documents reveal. The shopping list of fake discounts was discovered across dozens of categories including dairy, pet food, personal care, coffee, medicine, confectionery, breakfast cereal, snacks, household cleaning, pasta and soft drinks. Court documents obtained by The Australian that were lodged with the Federal Court by the Australian Competition and Consumer Commission (ACCC) now show the scale of the fake or illusory discounts across dozens of food and grocery categories at both supermarkets.
The ACCC launched one case each against Coles and Woolworths in the Federal Court, alleging they breached Australian Consumer Law by “misleading consumers through discount pricing claims” on the products. It has been alleged Woolworths applied the “fake” promotion to 266 products across 20 months between September 2021 and May 2023, while the ACCC claimed Coles falsely discounted 245 products across 15 months between February 2022 and May 2023. The competition watchdog contends that the supermarkets offered certain products at a regular price for at least 180 days.
They then increased the price of the products by at least 15 per cent for a relatively short period of time, and subsequently placed it onto their ‘Prices Dropped’ or ‘Down Down’ programme. Raid night & day mozzi spray was top of the “fake discounts” for Woolworths according to court documents lodged by the ACCC with its discount price actually 39 per cent above the regular price. Lemonade was marked up by about a third by each retailer from its original price, despite claims it was discounted.
Coles advertised a two-litre bottle of Sprite for $2.35 for about one year until February 2022. The cost then increased to $4.
40 for about one month to late March, and was then advertised as a “down down” discount for $3 for a year afterwards, producing an actual increase in price of 33 per cent. “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,” said ACCC Chair Gina Cass-Gottlieb when announcing that it was taking the two supermarkets to court last month.
“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 said that it first identified this conduct through “consumer contacts to the ACCC” and “social media monitoring”, which then prompted it to conduct an in-depth investigation of its own. It estimates that Woolworths and Coles sold tens of millions of the affected products and derived significant revenue from those sales.
Apart from these two cases which have been filed in the Federal Court, the ACCC is also currently conducting a 12-month inquiry into Australia’s supermarket sector which should conclude next year. Recently, the Treasurer announced $30 million over 3.5 years in additional funding for investigations and enforcement relating to the supermarket and retail sector.
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