The competition regulator is suing Coles and Woolworths over allegations they misled shoppers by engaging in “illusory” discounts on hundreds of common supermarket products.
The Australian Competition and Consumer Commission (ACCC) claimed on Monday that the major chains derived significant revenue from the sale of tens of millions of products sold through promotions that the regulator says breached consumer law.
The allegations relate to claims that Coles and Woolworths briefly increased the prices of hundreds of products, before reducing the prices to place them in their “Prices Dropped” or “Down Down” promotions.
Those promotional prices were misleading, according to the regulator, because they were higher than or the same as the regular long-term price previously offered.
“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,” ACCC chair Gina Cass-Gottlieb said.
“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.”
The regulator is seeking fines, costs and other orders in separate proceedings taken against the supermarket chains.
Coles and Woolworths were contacted for comment.
The regulator alleges the conduct involved 266 products for Woolworths and 245 products at Coles.