Australia’s consumer watchdog has initiated legal action against the nation’s leading supermarket chains, alleging misleading pricing practices. The Australian Competition and Consumer Commission (ACCC) has accused Coles and Woolworths of violating consumer laws by temporarily raising prices and then lowering them to levels that were either the same as or higher than the original prices.
Coles has announced its intention to defend against the claims, while Woolworths is reviewing the allegations. As the dominant players in Australia’s grocery sector, the two companies, which control two-thirds of the market, face heightened scrutiny regarding accusations of price gouging and anti-competitive behavior.
According to ACCC chair Gina Cass-Gottlieb, Australian consumers have come to expect that promotions like Woolworths’ ‘Prices Dropped’ and Coles’ ‘Down Down’ represent genuine price reductions. However, the investigation revealed that many of these discounts were deceptive.
The ACCC’s probe, prompted by consumer complaints and its own monitoring efforts, found that Woolworths misled customers regarding 266 products over a span of 20 months, while Coles misrepresented 245 products over 15 months. The affected items ranged from pet food and first-aid supplies to beloved Australian brands such as Arnott’s Tim Tam biscuits and Bega Cheese.
The watchdog estimated that both companies “sold tens of millions” of these affected products, generating substantial revenue from these sales. Cass-Gottlieb emphasized the significance of accurate pricing and discount claims, especially during periods of financial strain for consumers.
To address these allegations, the ACCC is urging the Federal Court of Australia to impose “significant” penalties on Coles and Woolworths, along with an order that would require the companies to support a charity providing meals to Australians in need, in addition to their current food aid efforts.
Coles stated that rising operational costs have led to increased product prices, asserting that the company aims to balance cost management while providing value to customers. It emphasized its commitment to upholding consumer law and building trust.
Similarly, Woolworths has expressed its intent to engage with the ACCC regarding the claims, acknowledging customer feedback regarding the need for meaningful value in their shopping experience.
