Price hike counterpunch: Coles, Woolworths oppose ACCC claims discounts were “illusory”

Supermarket giants Coles and Woolworths have opened their defences against allegations each promoted “misleading” discounts by claiming prices increased because food and grocery suppliers had requested them “in a period of sudden high inflation.”

The two heavyweight Australian supermarket, retail, and consumer chains have been accused of violating consumer law by the Australian Competition and Consumer Commission.

The ACCC claims Coles and Woolworths ran misleading “Down Down” and “Prices Dropped” campaigns respectively that allegedly included “illusory” discounts. Hand wash, coffee, Oreos, soft drink, and dog treats were among the 266 (for Woolworths) and 245 (Coles) items named in lodged court documents.

Separate court proceedings were formally opened against Coles Group Ltd (ASX:COL) and Woolworths Group Ltd (ASX:WOW) in September.

Things then finally got under way properly on Wednesday, with lawyers from each supermarket group appearing at a joint case management hearing at the Federal Court of Australia. There, Coles and Woolworths made it clear they plan to fight the blockbuster ACCC lawsuits; each case is now scheduled to appear before Federal Court Judge Michael O’Bryan in a date to be decided sometime in December.

During the same hearing, counsel for Woolworths, Cameron Moore SC, suggested the ACCC case was “misconceived” as he looked to refute the allegations.

Coles’ counsel, John Sheahan KC, argued similarly. “The ultimate discounted price, whether that was a genuine discount, has to be considered or assessed in light of the reality of the… (original) price… being the product of real cost increases imposed on a supplier which the supplier need to recoup,” he told the court.

“Because the implication, what we think is implicit in words like “illusory” or “genuine,” is that there was some artificiality in the (original) price. And we say no.”

Coles since lifted 1.28% to $18.14. Woolworths jumped 1.63% and has been $33.07.

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