THE Australian Competition and Consumer Commission has begun its legal action against supermarket giant Woolworths in the Federal Court today, for alleged misleading discount claims.

In September 2024 the ACCC commenced separate proceedings in the Federal Court against Woolworths and Coles for allegedly breaching the Australian Consumer Law by misleading consumers through discount pricing claims on hundreds of common supermarket products.

Meat products are not included in the list of products, with the exception of dog meat.

The ACCC website states:

The ACCC alleges that the supermarkets offered certain products at a regular price for at least 180 days. They then increased the price of the product by at least 15 per cent for a relatively short period of time, then placed it onto their ‘Prices Dropped’ or ‘Down Down’ program.

The ACCC alleges the display of the Prices Dropped and Down Down tickets was misleading, as the price of the products was in fact higher than or the same as the regular price at which the supermarket had previously offered the products for sale.

In the case of Woolworths, the ACCC alleges it made false or misleading representations to consumers about the prices of 266 products during September 2021 and May 2023.

Some products saw a 34 percent increase in the discounted price when compared to the regular price, prior to the price spike. A full list can be found here.

Products affected include Arnott’s Tim Tams biscuits, Dolmio sauces, Doritos salsa, Energizer batteries, Friskies cat food, Kellogg’s cereal, President butter, Listerine mouthwash, Moccona coffee capsules, Mother energy drinks, Mr Chen’s noodles, Nicorette patches, Ocean Blue smoked salmon, Oreo cookies, Palmolive dishwashing liquid, Raid insect spray, Sprite soft drink, Stayfree pads, Twisties, Uncle Tobys muesli bars, and Vicks VapoDrops.

Part of the ACCC’s list of 266 affected products in Woolworths submitted as part of the Federal Court proceedings.

“Following COVID, there was a period of extraordinary inflation, and we were acutely aware that customers expected Woolworths to provide value wherever possible,” a Woolworths spokesperson said.

“Inflation also put pressure on our suppliers’ costs, and we worked with them to reduce the inflationary impact on customers through our Prices Dropped program.

“We fundamentally disagree with the claims made – at no stage did we mislead or deceive customers.

“We respect the ACCC’s role and have taken the allegations seriously.”

Opening submissions from both the ACCC and Woolworths were heard by the Honourable Michael O’Bryan in the Federal Court today.

Justice O’Bryan played devil’s advocate in today’s hearing questioning the ACCC on whether consumers think beyond the immediate sale price and analyse previous pricing.

He also challenged the ACCC on what is a ‘regular price’ or ‘stable price’.

ACCC v Coles is still ongoing

Earlier this year Coles faced similar scrutiny in the Federal Court with the ACCC alleging Coles made false or misleading representations to consumers about the prices of 245 products during the February 2022 and May 2023.

Products include Arnott’s Shapes biscuits, Band-Aids, Bega cheese, Cadbury chocolates, Coca Cola soft drink, Colgate toothpaste, Danone yoghurt, Dettol multi-purpose wipes, Fab laundry liquid, Karicare formula, Kellogg’s snack bars, Kleenex tissues, Libra tampons, Lurpak butter, Maggi two-minute noodles, Nature’s Gift dog food, Nescafe instant coffee, Palmolive shampoo, Rexona deodorant, Sakata rice crackers, Sanitarium Weet-Bix cereal, Strepsils lozenges, Sunrice rice, Tena pads, Viva paper towels, Whiskas cat food, and Zafarelli pasta.

One of the ACCC’s examples of Coles pricing and promotional pricing.

Closing submissions were made at the end of February after 10 days of hearings, but there is yet to be an outcome.

In its closing submission Coles outlined the price deductions were genuine with a real discount applied from the “was” price to the “now” price.

“There is no reference on Down Down tickets to a “previous regular price”,” its submission stated.

“The short answer to the ACCC’s case is that what an ordinary reasonable consumer would relevantly take from the ticket is that the product had last been genuinely offered for sale and sold by Coles at the “was” price at the time indicated. Authority supports this.”

To read the full closing submission click here.

The ACCC is not making any allegation of any collusion or anti-competitive conduct by Woolworths and Coles as part of these proceedings.