‘Case of the century’ starts today with ACCC taking Coles to Federal Cour over ‘Down, Down’ deals

The Australian Competition and Consumer Commission and Coles (ASX:COL) are all set to face off in Federal Court today, after the ACCC alleged the supermarket’s iconic “Down, Down, Prices are Down” promo was misleading and that item prices weren’t made substantially lower under the deals.

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This case is the first time that either Coles or arch-rival Woolworths (ASX:WOW) will be tested in court over claims they “have been price-gouging.”

The meat and potatoes that will be aired in court today revolve around the ACCC’s allegations that, between February 2022 and May 2023, the “Down, Down” promo was run at Coles supermarkets alongside on-shelf prices that were actually more expensive than they had been just shortly before.

Coles is now starting a 10-day hearing on the allegations, with many expected to pay close attention now inflation conversations have reared their heads again in CY26. Woolies has similar court dates scheduled for April and May.

“The stakes are enormous,” said old watchdog boss Allan Fells, speaking to the ABC on Monday. “The ACCC will certainly be feeling nervous, as would Coles… It’s the case of the century because it affects not only Coles and Woolworths, but millions of businesses who discount [as well as their customers].”

The ACCC’s claim will focus on some 245 products included in the Coles “Down, Down” promotion, including Arnott’s Shapes, Band-Aids, and Kleenex tissues.

ACCC chairwoman Gina Cass-Gottlieb originally said back in September CY24, when these proceedings were first started, that the discounts were “illusory” because Coles had hiked prices before then starting the sales promos.

One example given in submitted court documents focuses on Strepsils throat lozenges: The tablets were sold at $5.50 for over 600 days, before a bump to $7. A month after that $1.50 change, Strepsils were then included in the “Down, Down” deals for $6, which still represented a 9% increase on $5.50.

“We’re seeking a significant penalty,” Ms Cass-Gottlieb declared. “This is a serious conduct that is of great concern to us, that affected many consumers.”

The supermarket on the stands has strongly rejected the claims, claiming price rises were justified due to inflation increasing supplier costs. Spiking global commodity prices through the early 2020s that weighed on packaging, freight, utilities, and international shipping will also be included in Coles’ defence.

Coles will be represented by Allens lawyers and several expensive barristers.

Heading into Monday, COL is selling at $22.05/share.

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