Coles Battles Allegations of Misleading Customers on Hundreds of Products

Coles is currently facing significant allegations from the Australian Competition and Consumer Commission (ACCC) regarding misleading pricing promotions. The case is being heard in the Federal Court and centers on claims that Coles misled customers with perceived discounts on numerous household products.

Overview of the Allegations

Initiated in late 2024, the ACCC accused Coles and its competitor Woolworths of misleading consumers. They contend that the prices displayed during promotions were often the same, or higher, than regular prices. This situation has raised important questions regarding pricing transparency in the retail industry.

Key Points in the Case

• The ACCC’s allegations focus on a range of household goods marketed with “illusory” discounts.
• Coles claims that rising costs forced them to adjust pricing on many products temporarily.
• The court will investigate 255 alleged breaches, primarily related to the “Down, Down” promotion.
• Potential fines could approach $50 million for each violation of consumer laws.

Details of the “Down, Down” Program

Coles introduced the “Down, Down” program as a way to demonstrate savings for consumers. This initiative was meant to provide stable pricing amid increasing cost pressures. The ACCC argues that these promotions did not reflect honest discounts, diminishing consumer trust.

Court Proceedings and Legal Teams

The case is being presided over by Justice Michael O’Bryan. He previously contributed to a review of Australian competition laws. Coles has enlisted John Sheahan KC as their chief barrister, while Garry Rich SC leads the ACCC’s legal team.

Market Context and Economic Pressures

This legal battle unfolds against a backdrop of rising inflation, which reached 3.8% in December 2024. Prime Minister Anthony Albanese has criticized both Coles and Woolworths for allegedly contributing to inflationary pressures. The implications of this case extend beyond the courtroom, potentially impacting the broader retail landscape.

Products Under Review

The court proceedings will specifically focus on twelve items, including:

• Karicare formula
• Packets of Arnott’s Shapes
• A tub of Danone yoghurt

Coles stands firm in its defense, asserting that their pricing strategy was made in response to significant cost increases, including those for commodities and shipping. The upcoming hearings will examine whether their promotional practices have genuinely supported consumer savings or misled shoppers.