ACCC sues Coles and Woolworths over allegations of ‘illusory’ discounts on common products
Hundreds of social media users started the ball rolling for two major lawsuits announced today in which the ACCC is alleging Wookworths and Coles misled customers with “illusory” discount campaigns on hundreds of products.
The watchdog claims each supermarket inflated the prices on these products by at least 15 per cent for brief periods after purchase prices had remained steady for at least six months to over a year.
After this brief price increase, the products would then be placed in the supermarket chains’ respective ongoing discount promotions – “Prices Dropped” for Woolworths and “Down Down” for Coles, the ACCC alleges.
The competition regulator is suing Coles and Woolworths over allegations they misled shoppers by offering “illusory” discounts on hundreds of common supermarket products.
The Australian Competition and Consumer Commission (ACCC) chair, Gina Cass-Gottlieb, said on Monday the regulator would seek a “a significant penalty” after the major retailers allegedly profited from the sale of tens of millions of products sold through promotions the regulator claimed breached consumer law.
Coles told shareholders on Monday it intends to defend the proceedings, while Woolworths said it would review the claims.
The major retailers are accused of inflating the prices of groceries for a short period, before placing them in their “Prices Dropped” or “Down Down” promotions.
Shares in Coles and Woolworths both fell more than 3.5% in early trading on Monday as investors reacted to news of the court actions.
Coles said in a statement the claims, which it intends to defend, relate to a period when the supermarket was receiving a large number of price increases from suppliers.
