Federal Court rules Coles misled shoppers with ‘Down Down’ discount campaign
Justice Michael O’Bryan determines ‘was’ prices were displayed for a median of just 28 days, rendering comparative pricing deceptive despite Coles’ inflation defence.
The Federal Court has ruled that Coles misled Australian shoppers through its ‘Down Down’ discount campaign, finding the supermarket engaged in conduct that contravened the Australian Consumer Law. Justice Michael O’Bryan handed down the judgment on Thursday, upholding allegations by the Australian Competition and Consumer Commission (ACCC) that the promotional strategy did not represent genuine savings.
The court identified a specific pricing structure for 245 products where items were sold at an initial price for a median period of a year. The price was then increased to a second level for a median of just 28 days, before being reduced to a third price that was often equal to or more expensive than the original level. This ‘was/is’ comparative pricing strategy displayed the new discounted ‘is’ price alongside the higher ‘was’ price on promotional tickets.
Justice O’Bryan determined the approach was deceptive because the ‘was’ prices had been in place for such a short duration. He noted that if the average shopper had known the ‘was’ prices were temporary, they would not have considered the discounts genuine. The court found the supermarket failed to disclose that items had been sold at lower prices prior to the temporary increase.
During the trial, Coles conceded that it had agreed on the new promotional prices with suppliers before raising the item’s price from its original level. The supermarket argued the discounts were genuine responses to rising wholesale costs during a period of high inflation. While Justice O’Bryan accepted the price increases were conducted in an ordinary commercial way, he rejected the argument that the promotions were not misleading.
A separate judgment regarding a similar ACCC case against rival supermarket Woolworths remains pending. The Woolworths case was heard in the Federal Court in Sydney in late April and early May, with the court yet to deliver its decision on the allegations of misleading conduct.
