Shoppers could pay more after Coles misconduct ruling
Customers could be forced to pay more for longer, according to a consumer expert, who says a major decision against Coles could have unintended consequences.
The Federal Court found on Thursday that many products marketed as part of Coles’ “Down Down” campaign were not priced high enough to constitute a genuine discount.
For example, a party pack of Arnott’s Barbecue Shapes was sold for $4.50 for almost a year, then the price was increased to $5.50 for less than a month and then marketed at the “Down and Down” price of $5.
Judge Michael O’Bryan ruled that products must remain at a higher price for at least 12 weeks for the discounts to be considered real.
Queensland University of Technology retail expert Gary Mortimer said prices were naturally rising due to inflation and general fuel costs and retailers would have to wait longer before offering discounted prices to consumers.
Professor Mortimer said Coles and possibly other retailers would move to a 12-week stabilization period before offering discounts in line with Judge O’Bryan’s ruling.
“The decision has some unintended consequences for prices and consumers,” he told AAP.
“If your favorite cereal box goes up 15 percent next week, you can be sure it will stay that price for at least 12 weeks before being discounted.”
One exception to the 12-week rule was a bag of dog food that sold for $4 for 296 days, then $6 for only seven days, before being sold for $4.50 as part of the “Down Down” promotion.
The dog food was one of 14 items that Judge O’Bryan found was not misleading because there was no “was” price on the ticket for customers to compare it with.
Speaking to reporters after Thursday’s ruling, Australian Competition and Consumer Commission chief Gina Cass-Gottlieb said retailers could offer a genuine “as is” price rather than an inflated price for a short period of time for customers to compare with the discount.
Labor MP Andrew Leigh said the case confirmed a fundamental principle.
“The discount should represent real savings, not a pricing gimmick,” he said.
“Shoppers should be able to trust the ticket on the shelf without needing a spreadsheet at the checkout.”
Consumer advocacy group Election campaigns director Andy Kelly said cost-of-living pressures made it more important than ever that customers could rely on promotions that reflected real discounts.
“Increasing prices while telling consumers prices were falling allowed Coles to have its cake and eat it too,” he said.
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