Coles Minimizes ‘Down Down’ Pricing Significance in Federal Court Case
Coles is currently involved in a significant federal court case led by the Australian Competition and Consumer Commission (ACCC). The ACCC has accused the supermarket chain of misleading consumers with its “Down Down” pricing strategy.
ACCC’s Allegations Against Coles
The ACCC claims that Coles engaged in a “planned” campaign to mislead customers about discounts on various household products. According to the consumer watchdog, Coles artificially inflated prices before advertising discounts that were often nonexistent or misleading. This included common items such as dog food, yoghurt, and soft drinks.
Key Events in the Court Case
- Date of Court Case: The case began on a recent date with Coles downplaying the impact of its “Down Down” price tags.
- Judicial Inquiry: Justice Michael O’Bryan questioned Coles about its marketing tactics and the clarity of the “Down Down” promotions.
- Coles Response: Coles maintains that the promotion indicated a commitment to low pricing.
Justice O’Bryan emphasized the need for clarity in consumer understanding of the pricing strategy and sought explicit answers from Coles regarding its marketing claims.
Pricing Practices Under Scrutiny
During the hearing, Coles detailed its pricing strategies. The retailer explained that setting prices requires a complex process, including forecasting and supplier negotiations. Coles argued that these factors were likely too complicated for the average shopper to comprehend while browsing.
One item highlighted in the proceedings was a can of dog food. Over a period of almost 300 days, the price fluctuated significantly, leading the ACCC to question the legitimacy of the “Down Down” label.
Specific Case Example
For a 1.2-kilogram tin of Nature’s Gift Wet Dog Food:
- Price for 300 days: $4
- Price increase after 300 days: $6 for one week
- Subsequent price: $4.50, advertised as “Down Down”
This pricing pattern was depicted by the ACCC as deceptive because consumers were led to believe they were obtaining a genuine discount.
Coles’ Defense Tactics
Coles’ legal representative, John Sheahan KC, asserted that the prices displayed were accurate and reflected a genuine discount. He challenged the ACCC to clarify what constitutes a “regular price” and argued that minor price increases are standard in the retail environment.
Implications of the Case
This high-profile case is referred to as the “case of the century,” with potential implications for consumer trust and business practices within the retail sector. The proceedings are set to continue for two weeks as both sides present their arguments.
