Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), is taking legal action against the nation’s two largest supermarket chains, Coles and Woolworths, alleging that they falsely advertised price reductions on numerous items.
The ACCC claims that both retailers violated consumer law by temporarily inflating prices before reinstating them at levels equal to or higher than the original costs. This practice misled consumers about the authenticity of their so-called permanent discounts.
Coles has stated that it will defend itself against the allegations, while Woolworths indicated it would review the claims.
Together, Coles and Woolworths dominate two-thirds of the Australian grocery market and have faced increasing scrutiny over potential price gouging and anti-competitive practices over the past year. Prime Minister Anthony Albanese expressed that such behavior, if proven, is “completely unacceptable,” emphasizing that consumers should not be misled.
ACCC chair Gina Cass-Gottlieb pointed out that the supermarket giants have long promoted their “Prices Dropped” and “Down Down” campaigns, which consumers expect to signify genuine price reductions. However, the investigation revealed that many of these discounts were misleading.
The ACCC’s investigation uncovered that Woolworths misled customers about 266 products over a span of 20 months, while Coles did so for 245 products across 15 months. The affected products range from pet food and Band-Aids to popular Australian snacks like Tim Tams and Kellogg’s cereal.
According to the ACCC, the two retailers sold “tens of millions” of these products, generating substantial revenue from the alleged deceptive practices. Cass-Gottlieb emphasized the importance of accurate pricing for consumers, especially amid rising living costs.
The ACCC is seeking “significant” penalties from both supermarkets and is requesting that they enhance their charitable meal delivery initiatives.
In response, Coles noted that rising operational costs have influenced product pricing, and it has attempted to balance these changes with customer value. Woolworths also expressed its commitment to working with the ACCC, stressing the need to provide meaningful value to its customers.
Amid this scrutiny, the government has initiated a review of the Food and Grocery Code of Conduct. The review recommends implementing a stronger, mandatory code enforced by the ACCC to protect both consumers and suppliers from unfair practices, with hefty fines for violations.
