Australia’s second-largest grocery retailer Coles will not learn the full legal consequences of its deceptive discounting practices for several more months, after a recent Federal Court hearing laid out the timeline for the ongoing case brought by the country’s top consumer regulator. Last month, Justice Michael O’Bryan of the Federal Court issued a landmark ruling finding Coles had misled Australian consumers through false discount claims on hundreds of everyday household products sold as part of its high-profile ‘Down Down’ national promotional campaign. The Australian Competition and Consumer Commission (ACCC), Australia’s independent consumer protection and competition watchdog, first initiated legal proceedings against the supermarket giant over questionable pricing practices across 245 products between February 2022 and May 2023. The ACCC has alleged that Coles deliberately manipulated prices during a period of soaring nationwide inflation, temporarily inflating baseline prices before marketing a subsequent ‘now’ price as a discount to consumers. These false discount claims were prominently displayed on large red in-store stickers that clearly showed a higher ‘was’ price alongside the advertised ‘now’ discounted price. The case returned to the Federal Court on Wednesday morning to lock in procedural next steps for both the ACCC’s enforcement action and a separate class action lawsuit filed on behalf of thousands of consumers who were impacted by the misleading pricing. Justice O’Bryan has ordered all involved parties to collaborate to draft a joint agreed statement of facts covering the majority of the 245 products at the center of the case, aligned with his earlier liability ruling. To streamline the initial trial process earlier this year, legal teams selected 14 representative products to test the arguments, and the remaining 231 products are scheduled to be finalized in advance of an August case management hearing. A two-day penalty hearing has been tentatively scheduled for December 16, where the ACCC and Coles will present legal submissions on what financial and legal penalties are appropriate for Coles’ violation of Australian consumer law. The court confirmed the ACCC is seeking both a significant financial penalty and declaratory relief that formally confirms Coles broke the law. The separate consumer class action, which has proceeded alongside the ACCC’s case to date, may be heard alongside the penalty hearing or split into a separate proceeding at a later date, depending on the court’s final decision. During the main liability trial, the court heard evidence that Coles had previously maintained an internal 12-week policy requiring products to be sold at a new baseline price for three months before the retailer could advertise it as a discount, a rule designed specifically to avoid misleading consumers about the authenticity of price cuts. However, amid intense price competition that witnesses described as a “race to the bottom” between Coles and its primary rival Woolworths, paired with widespread supplier price increases during the inflationary period, Coles cut this required waiting period from 12 weeks to just four weeks. Justice O’Bryan’s ruling confirmed that if Coles had retained the original 12-week waiting policy, ordinary consumers would have viewed the resulting price changes as genuine discounts. Notably, the judge also found that the underlying price increases implemented by Coles reflected actual supplier cost increases rather than artificially inflated baseline prices, a key point of distinction in the ruling. Coles has defended its conduct throughout the case, arguing that all price adjustments were legitimate responses to widespread inflation, and that the ‘Down Down’ campaign was intended to signal to consumers the retailer was working to keep grocery costs low. Following the liability ruling, ACCC Chair Gina Cass-Gottlieb confirmed the watchdog would push for a harsh penalty to act as a deterrent for similar misleading conduct across the retail sector. “While the level of penalty is a matter for the court to determine, the ACCC will be seeking a significant deterrent for such conduct,” Cass-Gottlieb said. “We will certainly make strong submissions on the level of penalty.” Justice O’Bryan has also issued suppression orders for certain commercial figures included in his ruling, to protect Coles’ commercially sensitive information including supplier costs, supplier funding support, and the retailer’s gross margin calculations. The case will next return to court for a case management hearing in August, with the final penalty decision not expected until early 2025 at the earliest.