Thursday鈥檚 Federal Court finding that supermarket giant Coles engaged in misleading conduct is good news for grocery buyers, but doesn鈥檛 solve all the problems of being a consumer in one of the world鈥檚 most concentrated retail food markets.
Justice Michael O鈥橞ryan upheld allegations from consumer watchdog, the Australian Competition and Consumer Commission (ACCC), that Coles hiked prices on various goods for short periods before dropping them 鈥淒own Down鈥� and claiming they鈥檇 been discounted. Consumers began to question it 鈥� flipping tags to find some shelf prices that were the same or lower than the new discounted prices. But the issues ran deeper.
This outcome is good news for consumers and should lead to more transparent, fairer pricing practices in the future
Choice previously caught Coles hiking the price of a product it claimed was 鈥渓ocked鈥� well before the retailer said it would. In December 2023, we complained to the ACCC, leading to Coles apologising and agreeing to refund customers who bought 20 鈥減rices locked鈥� products that it had quietly unlocked. The response to the ACCC鈥檚 probe into its 鈥淒own Down鈥� promotions was less congenial.
In the Federal Court decision, the judge ruled that 13 out of 14 examples of Coles鈥� 鈥淒own Down鈥� promotions misled consumers and that the discounts were not genuine. The goods needed to be sold for 12 weeks at the higher price before the discount could be considered genuine. Most of the products were advertised at the higher price for just four weeks. As a result, he found Coles had misled customers because those products weren鈥檛 sold at the previous 鈥渨as鈥� price for reasonable periods of time.
This outcome is good news for consumers and should lead to more transparent, fairer pricing practices in the future. It probably validates how many consumers felt. It may also make endless price increases less palatable and have a downward impact on price 鈥� alongside the impending commencement of the excessive pricing regime that Coles and Woolworths will have to comply with. But the judgment exposed a glaring potential loophole.
Are we about to see 鈥渨as鈥� prices disappear from shelves and similar conduct continue?
The Nature鈥檚 Gift dog food 鈥淒own Down鈥� promotion the ACCC provided as evidence was found to not be misleading as the tag didn鈥檛 include a 鈥渨as鈥� price, despite having only been sold at a higher price for one week. Are we about to see 鈥渨as鈥� prices disappear from shelves and similar conduct continue? It鈥檚 clear that this issue doesn鈥檛 necessarily end here.
The new unfair trading prohibition before parliament may well address this problem in relation to omitting material information in a way that manipulates a consumer鈥檚 decision-making, or unreasonably distorts the environment in which they make a decision. But that will need to be tested, and the new prohibition isn鈥檛 expected to come into force until halfway through 2027.
Dodgy sales tactics have damaged consumer trust, but Australians don’t have a lot of options when choosing where to shop.
The federal government accepted all the recommendations of the ACCC supermarkets inquiry. This included introducing minimum information requirements for price displays and discount promotions. That could well require supermarkets to display the 鈥渨as鈥� price for all discount promotions going forward, and this judgment makes these reforms even more urgent to protect consumers.
Although the facts of the ACCC鈥檚 case against Woolworths are similar, they鈥檙e not exactly the same, but this judgment will no doubt have triggered some tense meetings today as they await their fate.
Since consumers wised up to the supermarkets鈥� tactics, trust has plummeted. You have to wonder if the hit to trust in the brand was worth it, but in a country of highly concentrated markets, companies may not concentrate on that question so closely.
This and has been republished with permission.
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Bea Sherwood is a Senior campaigns and policy advisor. She works on campaigns that put the consumer voice at the heart of reform and advocacy. Bea is passionate about exposing and improving unfair business practices to shape a market that benefits consumers first and foremost.
Prior to 糖心Vlog, Bea worked for a range of non-government organisations focused on climate change, gambling reform and mental health advocacy.
Bea has a Certificate of Public Policy Analysis from The London School of Economics and Political Science, and a Bachelor of International Studies from the University of New South Wales.
Bea Sherwood is a Senior campaigns and policy advisor. She works on campaigns that put the consumer voice at the heart of reform and advocacy. Bea is passionate about exposing and improving unfair business practices to shape a market that benefits consumers first and foremost.
Prior to 糖心Vlog, Bea worked for a range of non-government organisations focused on climate change, gambling reform and mental health advocacy.
Bea has a Certificate of Public Policy Analysis from The London School of Economics and Political Science, and a Bachelor of International Studies from the University of New South Wales.
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