Coles and Woolworths are set to be hit with a spate of legal proceedings, as the Australian Competition & Consumer Commission (ACCC) takes launches separate court cases against the mega retailers over their ‘Prices Dropped’ and ‘Down Down’ claims – alleging that these are misleading.
The proceedings are to be heard at the Federal Court, where the ACCC will allege that Coles and Woolworths breached Australian Consumer Law by making discount pricing claims which misled consumers in relation to hundreds of common supermarket products.
Specifically, the regulator is focusing on a range of products which it believes were sold at regular long terms prices, excluding short-term specials, for at least six month and often up to a year, despite the advertised claims.
After this – the ACCC alleges – the same products were increased by at least 15% before being included in Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ promotion, with prices lower than the previous spike, but with prices that were higher than or equal to the regular long-term price.
ACCC chair Gina Cass-Gottlieb said the marketing campaigns had led Australians to form an inaccurate opinion of the pricing of these products.
“Following many years of marketing campaigns by Woolworths and Coles, Australian
consumers have come to understand that the ‘Prices Dropped’ and ‘Down Down’ promotions relate to a sustained reduction in the regular prices of supermarket products,” she said.
“However, in the case of these products, we allege the new ‘Prices Dropped’ and ‘Down Down’ promotional prices were actually higher than, or the same as, the previous regular price.
“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.”
She added that in many cases, the two companies had already decided to add these products to the campaigns before the price spike, but implemented the latter specifically to establish a higher ‘was’ price.
At 11:46 AEST, Coles shares were trading at $18.60 – a fall of 3.23% since the market opened, and Woolworths was trading at $33.87 – a fall of 3.17%.