Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), has filed a lawsuit against the country’s two largest supermarket chains, Coles and Woolworths, accusing them of falsely claiming permanent price drops on hundreds of items. According to the ACCC, both supermarkets violated consumer law by temporarily raising product prices before lowering them to a value that was either the same as or even higher than the original price, rendering their promotional offers meaningless.
Here's ads banner inside a post
Coles has stated that it will defend itself against the allegations, while Woolworths said it would review the claims made by the ACCC. The retail giants, which account for two-thirds of Australia’s supermarket market share, have been under increasing scrutiny over the past year due to accusations of price manipulation and anti-competitive practices. ACCC Chair Gina Cass-Gottlieb stated that after years of marketing, Australian shoppers have come to understand that Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ branding represent a sustained reduction in regular prices. However, she emphasized, “In many cases, the discounts were, in fact, illusory.”
The ACCC’s investigation, which was sparked by consumer complaints and its own social media monitoring, found that Woolworths misled customers about the pricing of 266 products over 20 months, while Coles did the same with 245 products over 15 months. The affected products included everything from pet food, Band-Aid plasters, and mouthwash to Australian favorites like Arnott’s Tim Tam biscuits, Bega Cheese, and Kellogg’s cereal.
The ACCC estimates that both companies “sold tens of millions” of these affected products and “derived significant revenue from those sales.” Ms. Cass-Gottlieb stressed, “Many consumers rely on discounts to help their grocery budgets stretch further, especially during this time of cost-of-living pressures.” She added, “It is critical that Australian consumers are able to rely on the accuracy of pricing and discount claims.”
Here's ads banner inside a post
The ACCC is seeking significant penalties from the Federal Court of Australia against Coles and Woolworths and is asking that the companies be ordered to fund a charity to deliver meals to Australians in need—on top of their existing food aid programs. In a statement, Coles said that rising operational costs led to price increases for its products. The company claimed it had “sought to strike an appropriate balance” between managing these costs and “offering value to customers through the recommencement of promotional activity as soon as possible after establishing the new non-promotional prices.”
Woolworths also said it would engage with the ACCC over the claims and emphasized that “Our customers are telling us they want us to work even harder to deliver meaningful value to them, and it’s important that they can trust the value they see when shopping in our stores.”
This issue has sparked a wave of outrage from consumers and shaken trust in Australia’s biggest supermarket chains. Can Coles and Woolworths weather this legal storm, or will this be a costly lesson in business ethics for the retail industry?
Here's ads banner inside a post
