ACCC Accuses Coles of Deliberate Customer Misleading Campaign

Supermarket giant Coles faces serious allegations in a significant legal battle initiated by the Australian Competition and Consumer Commission (ACCC). The consumer watchdog has accused Coles of orchestrating a “planned” campaign designed to mislead customers through its promotional pricing strategy.

ACCC’s Case Against Coles

The ACCC’s lawsuit, described by a former ACCC leader as “the case of the century,” commenced in federal court this month. The focal point of the case is Coles’ promotional program, known as “Down Down,” which has operated since 2010. The ACCC claims that Coles manipulated prices for 245 common household items to create the illusion of discounts.

Allegations of Misleading Practices

During the opening arguments, ACCC legal counsel Garry Rich asserted that Coles raised its prices prior to discounting them. In some instances, the promotional prices were the same as, or even higher than, the regular rates.

• Coles allegedly raised prices for brief periods before the discounts.
• The ACCC claims that these pricing strategies resulted in “illusory” discounts.
• Rich described customer experiences as “not fair dinkum,” urging that shoppers were misled.

Focus on Dog Food Pricing

One example highlighted in the case was the pricing of Nature’s Gift Wet Dog Food. For nearly 300 days, the product was sold at $4, but for seven days, the price rose to $6, before dropping to $4.50. The ACCC argues that this pricing structure was misleading, as it obscured the true history of the pricing.

• Before the promotion, the dog food was consistently priced at $4.
• The subsequent “Down Down” price of $4.50 misrepresented an actual discount.

Judicial Reactions and Coles’ Defense

Justice Michael O’Bryan challenged aspects of the ACCC’s argument, stating that the history of pricing is irrelevant in the current economic climate. In contrast, Rich counters that understanding the product’s pricing history is crucial for assessing the misleading nature of Coles’ promotional statements.

Coles has denied the allegations and plans to present its defense in the court. The supermarket chain maintains that it has offered genuine discounts to its customers, asserting that the price increases were warranted due to inflation and pressures from suppliers.

Consumer Reactions and Implications

This case not only highlights the practices of Coles but could also impact the broader retail sector. Consumer group CHOICE supports the ACCC’s legal action, emphasizing the necessity for clear and transparent pricing amid rising living costs.

As the trial continues, the implications of this case could resonate throughout the industry, potentially reshaping promotional strategies and consumer protection policies in Australia.