Coles ‘Down Down’ court ruling could keep Australian supermarket prices higher for longer

Customers could end up paying more for longer, according to a consumer expert who says a landmark ruling against Coles will have unintended consequences.

The Federal Court found on Thursday that several products marketed under Coles’ “Down Down” campaign were not held at a higher price long enough to constitute a genuine discount.

For example, a party pack of Arnott’s Barbecue Shapes was sold at $4.50 for almost a year, before the price was raised to $5.50 for less than a month and then marketed at the “Down Down” price of $5.

Justice Michael O’Bryan ruled products would have had to remain at the higher price for at least 12 weeks for the discounts to have been considered genuine.

Queensland University of Technology retail expert Gary Mortimer said prices naturally increased with inflation and fuel overheads and retailers would have to wait longer before offering consumers a discounted price.

Professor Mortimer said Coles, and likely other retailers, would move to 12 weeks of stability before offering a discount, in line with Justice O’Bryan’s ruling.

“The decision does have some unintended consequences for prices and consumers,” he told AAP.

“If your favourite box of cereal goes up by 15 per cent next week, you can be assured it will be up at that price for at least 12 weeks before it can be put on a discount.”

An exception to the 12-week rule was a bag of dog food that retailed for $4 for 296 days, then $6 for just seven days, before being sold for $4.50 under a “Down Down” promotion.

The dog food was the one product of 14 under Justice O’Bryan’s consideration that he did not find misleading because it did not have a “was” price on the ticket for customers to compare to.

Addressing reporters after Thursday’s ruling, Australian Competition and Consumer Commission chair Gina Cass-Gottlieb said retailers could present a genuine “was” price, rather than a briefly inflated one, for customers to compare with a discount.

Labor MP Andrew Leigh said the case had confirmed a basic principle.

“A discount should mean a real saving, not a pricing trick,” he said.

“Shoppers should be able to trust the ticket on the shelf, without needing a spreadsheet at the checkout.”

Consumer advocacy group Choice campaigns director Andy Kelly said cost-of-living pressures made it more important than ever for customers to be able to trust promotions reflected genuine discounts.

“Hiking prices whilst telling consumers that prices are down has allowed Coles to have its cake and eat it too,” he said.