Captain Nemo
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Australian Politics
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Good news:
MEDIA RELEASE
23 September 2024
ACCC takes Woolworths and Coles to court over alleged misleading ‘Prices
Dropped’ and ‘Down Down’ claims
The ACCC has commenced separate proceedings in the Federal Court against Woolworths
Group Limited (Woolworths) (ASX: WOW) and Coles Supermarkets Australia Pty Ltd (Coles)
(a subsidiary of Coles Group Limited - ASX: COL) for allegedly breaching the Australian
Consumer Law by misleading consumers through discount pricing claims on hundreds of
common supermarket products.
The ACCC’s allegations relate to products sold by each of Woolworths and Coles at regular
long-term prices which remained the same, excluding short-term specials, for at least six
months and in many cases for at least a year.
The products were then subject to price rises of at least 15 per cent for brief periods, before
being placed in Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ promotion,
at prices lower than during the price spike but higher than, or the same as, the regular price
that applied before the price spike.
“Following many years of marketing campaigns by Woolworths and Coles, Australian
consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions
relate to a sustained reduction in the regular prices of supermarket products. However, in the
case of these products, we allege the new ‘Prices Dropped’ and ‘Down Down’ promotional
prices were actually higher than, or the same as, the previous regular price,” ACCC Chair
Gina Cass-Gottlieb said.
“We allege that each of Woolworths and Coles breached the Australian Consumer Law by
making misleading claims about discounts, when the discounts were, in fact, illusory.”
“We also allege that in many cases both Woolworths and Coles had already planned to later
place the products on a ‘Prices Dropped’ or ‘Down Down’ promotion before the price spike,
and implemented the temporary price spike for the purpose of establishing a higher ‘was’
price,” Ms Cass-Gottlieb said.
The ACCC alleges the conduct involved 266 products for Woolworths at different times
across 20 months, and 245 products for Coles at different times across 15 months.
The representations were made on pricing tickets displayed to consumers in-store on
supermarket shelves and online, usually with a ‘was’ price displayed showing what the price
was during the short-term price spike and the date of that price.
The ACCC identified this conduct through consumer contacts to the ACCC and social media
monitoring, and then conducted an in-depth investigation using its compulsory powers.
“Many consumers rely on discounts to help their grocery budgets stretch further, particularly
during this time of cost of living pressures.
It is critical that Australian consumers are able to
rely on the accuracy of pricing and discount claims,” Ms Cass-Gottlieb said.
“We allege these misleading claims about illusory discounts diminished the ability of
consumers to make informed choices about what products to buy, and where.”
The ACCC estimates that Woolworths and Coles sold tens of millions of the affected
products and derived significant revenue from those sales.
The ACCC is seeking declarations, penalties, costs and other orders.
The ACCC is also
seeking community service orders that Woolworths and Coles must each fund a registered
charity to deliver meals to Australians in need, in addition to their pre-existing charitable
meal delivery programs.
Alleged conduct
The ACCC alleges that the supermarkets offered certain products at a regular price for at
least 180 days.
They then increased the price of the product by at least 15 per cent for a
relatively short period of time, and subsequently placed it onto their ‘Prices Dropped’ or
‘Down Down’ program.
The ACCC alleges the display of the Prices Dropped and Down Down tickets was
misleading, as the price of the products was in fact higher than or the same as the regular
price at which the supermarket had previously offered the products for sale.
Alleged conduct by Woolworths
The ACCC alleges that Woolworths made false or misleading representations to consumers
about the prices of 266 products during the period between September 2021 and May 2023.
Products affected include Arnott’s Tim Tams biscuits, Dolmio sauces, Doritos salsa,
Energizer batteries, Friskies cat food, Kellogg’s cereal, President butter, Listerine
mouthwash, Moccona coffee capsules, Mother energy drinks, Mr Chen’s noodles, Nicorette
patches, Ocean Blue smoked salmon, Oreo cookies, Palmolive dishwashing liquid, Raid
insect spray, Sprite soft drink, Stayfree pads, Twisties, Uncle Tobys muesli bars, and Vicks
VapoDrops.
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