**Australia's Supermarket Giants Face Legal Action Over Alleged False Discount Claims**
Australia's two largest supermarket chains, Coles and Woolworths, are being sued by the Australian Competition and Consumer Commission (ACCC) over allegations of misleading pricing practices. The ACCC claims the grocery giants falsely advertised permanent price drops on hundreds of items, when in fact, they temporarily raised prices before lowering them to levels that were the same as, or even higher than, the original cost.
Coles has stated it will defend itself against the allegations, while Woolworths said it will review the claims. Together, the two retailers control two-thirds of the Australian grocery market and have faced increasing scrutiny over alleged price gouging and anti-competitive behavior in the past year.
Prime Minister Anthony Albanese called the alleged conduct "completely unacceptable" and emphasized that customers deserve honest treatment. “This is not in the Australian spirit. Customers don’t deserve to be treated as fools,” he said at a press conference, where he also unveiled draft legislation for a new supermarket code of conduct.
ACCC chair Gina Cass-Gottlieb explained that both companies have long promoted campaigns such as ‘Prices Dropped’ and ‘Down Down,’ which Australian consumers have come to trust as indicators of lasting price reductions. However, many of these price cuts were "illusory," she said.
The ACCC’s investigation, prompted by complaints and internal monitoring, found that Woolworths had misled customers about discounts on 266 products over 20 months, while Coles had done so with 245 products over 15 months. Items involved ranged from everyday essentials like pet food, mouthwash, and Band-Aid plasters to iconic Australian products such as Arnott's Tim Tam biscuits, Bega Cheese, and Kellogg’s cereal.
The watchdog estimated that Coles and Woolworths sold tens of millions of these products, generating substantial revenue from the misleading discounts. “Many consumers rely on discounts to help their grocery budgets stretch further, particularly during this time of cost of living pressures,” Cass-Gottlieb said. “It is critical that Australian consumers are able to rely on the accuracy of pricing and discount claims.”
The ACCC is seeking significant penalties from the Federal Court of Australia and has called for both companies to increase their charitable meal delivery programs as part of any ruling.
In response, Coles said rising costs led to price increases, and the company "sought to strike an appropriate balance" between managing those costs and providing value to customers. Coles emphasized that it takes consumer law seriously and is committed to maintaining trust with stakeholders.
Woolworths also responded, stating it would engage with the ACCC over the claims and highlighting its commitment to offering meaningful value to customers. “It’s important they can trust the value they see when shopping in our stores,” the company said.
Amid the growing scrutiny, the government commissioned a review of the existing Food and Grocery Code of Conduct. The review recommended the introduction of a stronger, mandatory code, to be overseen by the ACCC. The proposed new code would not only protect consumers but also safeguard suppliers, who have complained of being unfairly pressured by the supermarket giants. The code would include hefty fines for violations and set standards for how companies deal with their suppliers.
