Coles tells court its Down Down promotions were ‘fair dinkum’ and did not mislead shoppers | Coles
Coles defended its promotional prices in a high-profile case brought by the consumer watchdog, arguing that shoppers would understand the supermarket’s famous “Down Down” promotion as a “fair dinkum”.
The federal court battle between the Australian Competition and Consumer Commission (ACCC) and Coles began this week, testing claims the supermarket was breaking the law by offering “misleading” discounts on many everyday items.
The legal argument will focus in part on what consumers understand of Coles’ “Down Down” promotion; The supermarket will argue that the average consumer will perceive the promotion as a general, long-term discount.
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John Sheahan KC, representing Coles, said on Tuesday that consumers would recognize the promotion as a real reduction in price.
“What they’ll be worried about when they’re walking down the aisle and thinking about what to buy for shopping today is whether the alleged discount is fair,” Sheahan said.
“As long as the price is a genuine price, not made up or ad hoc, the consumer’s interest is appropriately served.”
Coles’ defense is that the promotional prices are genuine discounts offered to shoppers following an increase in suppliers’ wholesale costs at a time of rising inflation.
“To say prices are down clearly means the price is lower than it would have been without this promotion,” Sheahan said.
The case will put pricing practices in the supermarket industry under the spotlight and have implications for much the same case as the ACCC against Woolworths, which is expected to be heard at a later date.
The ACCC is seeking huge fines and community service orders against Coles, which together with Woolworths controls two-thirds of the Australian grocery market.
The regulator claims Coles misled customers because products were sold at normal price for at least six months, then were temporarily inflated and then dropped slightly as part of a “Down Down” promotion.
On Monday, ACCC representative barrister Garry Rich SC described the discounts as “completely misleading” because prices were either higher or the same as previous long-term prices.
The ACCC alleges Coles engaged in misleading conduct by inflating the price of products such as dog food to a “too high” 50% higher price for just seven days and then relaunching them as “Down Down” discounts.
Although the promotional price was technically lower than the price charged the previous week, the regulator argued that it was a deceptive tactic because the promotional price was higher than the previous long-term price.
The trial continues.
