Coles accused of ‘utterly misleading’ grocery prices
Supermarket giant Coles has been accused of artificially increasing prices and passing them off as discounts before lowering them.
Australia’s consumer watchdog is pursuing the chain through the Federal Court for allegedly misleading consumers with its “down, down, prices down” campaign.
The Australian Competition and Consumer Commission’s case against Coles began on Monday, with lawyers accusing the company of using “completely misleading” prices.
The ACCC’s lawyer claimed Coles’ well-known “inferior” marketing campaign, with “a rattle stuck in one’s ear for longer than is healthy”, deliberately misled customers.
“Why are you telling your customers that your prices will drop when they don’t?” the commission’s lawyer, Garry Rich SC, told the court.
“The particular promotion they chose was one based on convincing customers that the price of this product had dropped.
“It is a highly inappropriate promotional mechanism to use when everyone at Coles knows the price has gone up.”
He opened the hearing using a 1.2-kg sample of Nature’s Gift adult wet dog food, which he said was sold for $4 from April 2022 to February 2023.
Mr Rich claimed Coles raised the price of the product to $6 for a week before dropping it to $4.50.
“Coles’ statement was completely misleading,” he said.
“Coles had raised its price to $6 just seven days before the promotion, and for the 296 days before that the price had been $4.”
Judge Michael O’Bryan questioned whether the price increase was due to the supplier increasing its costs.
Mr Rich said consumers would not know this information and that claiming a later price discount was misleading.
Using a giant red thumb, his “down” campaign began in 2010, claiming that prices of everyday household products had fallen and remained low.
Mr Rich said Coles was helping Australians keep grocery costs down as part of its commitment to lower the cost of living.
But in reality Coles allegedly misled customers about the prices of 245 similar products, including toothpaste, soft drinks, cheese, shampoo, band-aids and washing powder.
“Under the conditions we live in here, you’re not reducing the cost of living, you’re not reducing prices,” he said.
Coles is fighting all the allegations brought by the ACCC as the hearing continues.
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