Coles has been found by the Federal Court to have engaged in misleading conduct regarding its 'Down Down' discount promotions. Justice Michael O’Bryan ruled that the supermarket giant's pricing strategy misled consumers on an "industrial scale," a finding that stems from allegations brought by the Australian Competition and Consumer Commission (ACCC). The core of the ruling hinges on the finding that many products advertised with 'Down Down' pricing were only at a higher price for a brief period before the discount was applied. This practice, according to the court, created a false impression of significant savings for shoppers.
The ACCC had initially taken issue with Coles' discount scheme, arguing that the promoted prices were often the same or higher than the product's usual price before the supposed sale. The watchdog alleged this occurred across 245 different products. This widespread application of the alleged misleading tactic is central to the court's judgment.
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The court specifically noted that the increased prices leading up to the 'Down Down' promotion were implemented because suppliers desired it. This detail suggests a complex interplay between Coles and its suppliers that ultimately affected consumer perception of value. Justice O’Bryan stated that by offering sample products under 'Down Down' tickets, Coles acted in a manner that was misleading in trade or commerce, violating the Australian Consumer Law with respect to the price representations.
This case has put a spotlight on the pricing strategies of major supermarkets during a period of escalating inflation, where grocery costs have been notably rising. The ACCC, seeking substantial penalties and community service orders, highlighted examples such as Nature's Gift wet dog food, Rexona deodorant, Arnott’s Shapes, and Coca-Cola as part of its case, focusing on a sample of about a dozen products from the larger list.
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Coles' defense had suggested that customers were generally aware of price fluctuations, but the court's decision implies this awareness did not negate the misleading nature of the 'Down Down' promotion's overall impression. The Australian Consumer Law allows for conduct to be deemed misleading even without intentional deception, focusing instead on the impact on the reasonable consumer.
