Court Case Begins: Coles Faces Accusations of Misleading Discounts

Coles faces serious allegations as its court case began in Melbourne, initiated by the Australian Competition and Consumer Commission (ACCC). The ACCC accuses the supermarket giant of misleading consumers with deceptive discount practices between February 2022 and May 2023. The core of the allegations revolves around “illusory” discounts offered during this period.

The Allegations Against Coles

During the specified time frame, Coles reportedly raised prices on at least 245 different products. Following these increases, the retailer claimed discounts through its “Down Down” promotions. However, the ACCC asserts these promotional prices were often the same as or higher than the ordinary price displayed prior to the increase.

Key Examples Cited

• The ACCC highlighted the case of a 16-pack of Strepsils Throat Lozenges, which saw its price raised from A$5.50 to A$7 for 28 days. It was then advertised as a “Down Down” deal at $6, representing a 9% increase from the previous price.
• Alongside Strepsils, other products, such as Colgate toothpaste and Sanitarium Weet-Bix cereal, were mentioned in the case.

Legal Arguments and Responses

The ACCC’s lead counsel, Garry Rich SC, described Coles’ actions as “utterly misleading.” They argue that the supermarket’s conduct appears to be planned, suggesting a deliberate intention to mislead consumers.

In contrast, Coles’ legal team, led by barrister John Sheahan KC, stated that shoppers were informed of price fluctuations prior to their purchases. Coles plans to claim that the price increases were simply a response to rising global costs such as packaging and shipping.

Consumer Understanding of Discounts

The ACCC emphasizes that the “Down Down” campaign misleads consumers into believing they benefit from significant discounts. The Commission argues that consumers should accept these promotions at face value, without needing to track past price changes.

Potential Outcomes

If Coles is found liable for misleading representations, penalties could be substantial. The maximum fine can reach up to $50 million per violation. In 2024, Qantas was ordered to pay $100 million for misleading consumers regarding cancelled flights.

Broader Implications

This case shines a light on consumer protection laws in Australia. The outcome could set a precedent for how discounts are advertised in the retail sector. A related case against Woolworths, which also faces allegations of misleading discounts, is pending and may be influenced by this litigation.

The ongoing proceedings will further explore the balance between retailers’ rights to adjust prices and consumer rights to clear and fair pricing. The case continues to unfold, highlighting the critical issues in retail marketing practices and consumer trust.