ACCC sues Coles and Woolworths over fake discount claims.
The Australian Competition and Consumer Commission (ACCC) claims Coles and Woolworths broke consumer law by temporarily raising prices before lowering them to a value either the same as or higher than the original cost.
Prime Minister Anthony Albanese said the alleged conduct, if proven to be true, is "completely unacceptable" and said "this is not in the Australian spirit. Customers don't deserve to be treated as fools." Mr Albanese also revealed draft legislation for a previously promised "code of conduct" for supermarkets.
ACCC chair Gina Cass-Gottlieb said Coles and Woolworths have spent years marketing their 'Prices Dropped' and 'Down Down' promotions, which Australian shoppers now understand to represent a sustained reduction in the regular prices of products. However, she noted that in many cases "the discounts were, in fact, illusory".
The watchdog's investigation initiated by consumer complaints and the ACCC's independent oversight, revealed that Woolworths had provided misleading information regarding 266 products over 20 months, and Coles for 245 products over a period of 15 months. The ACCC estimated that Coles and Woolworths “sold tens of millions" of the impacted products and "generated significant revenue from those sales".
ACCC chair Gina Cass-Gottlieb said: "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."
The ACCC is seeking that the Federal Court of Australia impose "significant" penalties on Coles and Woolworths. Coles stated that the company's increasing expenses have resulted in a rise in product prices and it takes consumer law "extremely seriously" and "places great emphasis on building trust with all stakeholders".
Woolworths said in a statement: "Our customers are telling us they want us to work even harder to deliver meaningful value to them and it's important they can trust the value they see when shopping our stores."
The government initiated a review of the current Food and Grocery Code of Conduct in the country. The review suggested much stronger mandatory code of conduct which would be introduced by ACCC to ensure the protection of suppliers and consumers.
