Tim Tam turmoil: Woolies defends ‘fake discount’ claims
Supermarket giant Woolworths will defend its discount regime in court against consumer watchdog allegations that it uses fake discounts to mislead customers despite higher prices.
Woolworths will present its case to the Federal Court after Coles entered its defense in February, which will stay the decision until both grocers present their overwhelming claim.
The Australian Competition and Consumer Commission launched the joint action in 2024, alleging the pair had breached consumer law by briefly raising and then lowering the prices of everyday items as part of separate “Prices Down” and “Down” promotions.
The ACCC alleges that discounted prices are often the same or higher than original shelf prices and therefore deliberately mislead consumers.
The watchdog claims the conduct involved 266 products for Woolworths at different times over 20 months between late 2021 and mid-2023, affecting tens of millions of its and Coles sales.
The product list was divided into 12 agreed upon items for review in court; these included the Tim Tams Family pack, Carman’s classic fruit and nut muesli bars and Sakata rice crackers.
“We argue that these misleading claims about misleading discounts reduce consumers’ ability to make informed choices about what products to buy and where to buy them,” ACCC chair Gina Cass-Gottlieb said.
The watchdog does not allege that Coles and Woolworths colluded or engaged in anti-competitive behavior.
In a statement to AAP, Woolworths said it fundamentally disputed the allegations and had not misled or deceived its customers at any stage.
“There has been a period of extraordinary inflation in the wake of COVID and we were acutely aware that customers expect Woolworths to deliver value wherever possible,” the spokesperson said.
“Inflation is also putting pressure on our suppliers’ costs and we have worked with them to reduce the inflationary impact on customers through our Falling Prices programme.”
The supermarket giant said it respected the ACCC’s role and took the allegations seriously.
The case continues with a new wave of inflation set to hit Australian consumers due to rising oil prices caused by the US-led war against Iran.
Australia’s supermarket industry has come under intense scrutiny following cost pressures brought on by the COVID-19 pandemic, leading to multiple investigations.
One such study found that Australian supermarkets were some of the most profitable in the world, with margins increasing in the years after the pandemic.
It found no evidence of price gouging, but the watchdog has flagged possible future legal action through new excessive pricing laws coming into force in 2026.
Coles and Woolworths make up nearly two-thirds of the Australian supermarket industry.
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