‘Not genuine’: Coles ‘illusory’ discounts misled shoppers, court rules

Coles misled shoppers with illusory discounts, a court has ruled after a landmark case brought by the consumer watchdog.

On Thursday morning, Federal Court judge Michael O’Bryan delivered his ruling, finding Coles deliberately disguised price hikes as discounts under its Down Down price campaign.

“13 of the 14 ‘Down Down’ tickets that were the subject of consideration in the joint liability trial were misleading because the relevant products were not sold at the ‘was’ price stated on the ticket for a reasonable period,” Justice O’Bryan said.

“As a consequence, the discount represented on the tickets was not genuine.”

The decision could see the $28 billion company hit with significant penalties.

The Australian Competition and Consumer Commission brought separate but similar cases against the country’s two dominant supermarket chains with a Woolworths suit awaiting judgment at a later date.

Both cases alleged the supermarkets misled consumers by increasing prices for a short time before lowering them to above the original price and marketing it as a discount.

In one instance, a can of Nature’s Gift dog food was on sale for $4 nearly a year before the price was briefly increased to $6.

It was then sold under a Down Down ticket for $4.50.

The watchdog identified hundreds of products on the Coles campaign and a similar Prices Dropped push from Woolworths that followed a similar formula.

During separate hearings, lawyers for the supermarkets argued prices increased due to inflationary pressures and the discounts were genuine.

ACCC barrister Garry Rich SC argued during hearings that Coles was trying to avoid losing customers by disguising price increases as discounts.

“Why on earth are you telling your customers your prices are going down? They’re not,” he told the court.

But Coles’ barrister John Sheahan argued “ordinary, reasonable consumers” knew that prices generally trended upward due to inflation.