Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), is suing the country’s largest supermarket chains, Coles and Woolworths, over allegations of misleading discount practices. The ACCC claims that both companies falsely advertised permanent price reductions on hundreds of items after temporarily inflating their prices.
In response to the lawsuit, Coles stated it would vigorously defend itself, while Woolworths announced it would review the allegations. Together, these grocery giants control about two-thirds of the Australian market and have faced mounting scrutiny over alleged price gouging and anti-competitive behavior.
Prime Minister Anthony Albanese expressed strong disapproval of the alleged practices, stating they are “completely unacceptable” and emphasize that consumers should not be treated as fools. He also introduced draft legislation for a new “code of conduct” for supermarkets.
ACCC chair Gina Cass-Gottlieb highlighted that Coles and Woolworths have long marketed their ‘Prices Dropped’ and ‘Down Down’ promotions, which consumers believe reflect genuine price reductions. However, the investigation revealed that the discounts were often “illusory.”
The ACCC’s inquiry, prompted by consumer complaints and monitoring, found Woolworths misled customers regarding 266 products over 20 months and Coles misled on 245 products across 15 months. The affected products included everyday items like pet food, Band-Aid plasters, and popular snacks such as Tim Tams and Bega Cheese.
The ACCC estimated that tens of millions of these products were sold, generating substantial revenue for both supermarkets. “Many consumers rely on discounts to stretch their grocery budgets, especially during cost-of-living pressures,” said Cass-Gottlieb.
The ACCC is seeking significant penalties from both companies and an order to enhance their charitable meal delivery programs. Coles defended its actions by stating that rising costs had necessitated price increases, while emphasizing its commitment to consumer trust. Woolworths echoed this sentiment, stating it aims to provide meaningful value and maintain customer trust.
In light of increasing scrutiny, the government has commissioned a review of the existing Food and Grocery Code of Conduct, recommending the establishment of a mandatory code to protect both consumers and suppliers, with hefty fines for non-compliance.
