Coles and Woolworths will be taken to court for allegedly misleading consumers in their ‘Down Down’ and ‘Prices Dropped’ campaigns.
The Australian Competition and Consumer Commission (ACCC) has launched legal proceedings against major supermarkets for alleged breaches of consumer law.
Prime Minister Anthony Albanese said the allegations were “serious”, adding: “If this is true, it is completely unacceptable. It is not the Australian spirit.”
“Customers don’t deserve to be treated like idiots by supermarkets. They deserve much better than that.”
The consumer watchdog examined 245 products at Coles over 15 months and 266 products at Woolworths over 20 months, alleging supermarkets applied price hikes to items before lowering costs, with discounted items selling above usual prices.
ACCC chair Gina Cass-Gottlieb said Woolworths and Coles were misleading customers with “illusory” discounts.
“We also allege that in many cases Woolworths and Coles had already planned to subsequently place the products in a ‘Prices Down’ or ‘Down’ promotion before the price increase and implemented the temporary price increase in the aim to establish a higher price. “That was the price,” Cass-Gottlieb said.
The ACCC found that the price of some products had increased by at least 15 per cent for brief periods before being included in discount promotions.
She conducted a thorough investigation using industry contacts and social media monitoring.
The ACCC estimates tens of millions of products have been affected and says this diminishes consumers’ ability to make an informed choice.
The legal action follows a Senate inquiry into supermarket prices and calls for an overhaul of the sector to ensure people can afford everyday items during a cost of living crisis.
In a statement, Woolworths Group said it would carefully review the allegations and continue to engage with the ACCC on the matter.
“Our Prices Dropped program was introduced to offer our customers great everyday value on their favorite products,” said Woolworths Group CEO Amanda Bardwell.
“We remain committed to offering customers numerous ways to save at checkout. »
Coles Group said it took compliance with Australian consumer law “extremely seriously” and intended to defend itself in the proceedings.
“The allegations relate to a period of significant cost inflation, during which Coles was receiving a large number of cost price increases from our suppliers and, in addition, Coles’ own costs were increasing, which “resulted in an increase in the retail price of many products,” he said in a statement to the Australian Securities Exchange on Monday.
“Coles has sought to strike an appropriate balance between managing the impact of cost price increases on retail prices and delivering value to customers through the resumption of promotional activities as soon as possible following the establishment of the new non-promotional price.”
