Supermarkets under fire for allegedly misleading consumers with discount claims

AUSTRALIA’S consumer watchdog will pursue legal action against Woolworths and Coles for allegedly offering consumers misleading discounts on hundreds of everyday supermarket items.

The Australian Competition and Consumer Commission (ACCC) claims that both supermarket chains increased the prices of more than 200 products by at least 15 per cent for a period of time in some cases as brief as three weeks.

These products were then reduced and marketed as part of Woolworths’ ‘Prices Dropped’ promotion or Coles’ ‘Down Down’ promotion, to prices either the same as, or higher than, the product’s initial price prior to the price spike.

“We allege that each Woolworths and Coles breached the Australian Consumer Law by making misleading claims about discounts, when the discount were, in fact, illusory,” ACCC chair Gina Cass-Gottlieb said on Monday.

“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 ACCC estimated tens of millions of products, and significant revenue, was derived from these sales, and will seek “a significant penalty”.

Some of the products believed to be affected include Oreo cookies, Arnott’s Tim Tams, Energizer batteries, Uncle Tobys museli bars and Listerine mouthwash.

“Many consumers rely on discounts to help their grocery budgets stretch further, particularly during this time of cost-of-living pressures,” Ms Cass-Gottlieb said.

“It is critical that Australian consumers are able to rely on the accuracy of pricing and discount claims.”

CHOICE director of campaigns Rosie Thomas said the consumer advocacy group was pleased to hear the ACCC will be taking Coles and Woolworths to court.

“We know from our extensive work in this area that promotional labels at the major supermarkets often confuse shoppers, and the frequent changes in prices make it difficult to tell whether there is a genuine discount or not,” she said.

“This kind of bad behaviour from the supermarkets… urgently needs to be addressed – particularly during a cost-of-living crisis when people are doing it tough.”

Federal Corangamite MP Libby Coker said the allegations the ACCC was bringing before the court were serious and if found to be true, were “completely unacceptable”.

Prime Minister Anthony Albanese said Australian consumers don’t deserve to be deserved as “fools” by the supermarkets.

Following the ACCC’s announcement on Monday this week, Mr Albanese announced the release of an exposure draft of the new mandatory Food and Grocery Code, which will see the implementation of the recommendations from Dr Craig Emerson’s independent review into the code in full.

An exposure draft of amendments to the Competition and Consumer Act has similarly been released for community consultation, with the proposed changes introducing higher maximum penalties for breaches of the Food and Grocery Code.