One of Australia’s dominant retail giants, Coles Supermarkets, is staring down substantial financial penalties after a landmark federal court ruling found it deliberately misled shoppers through deceptive fake discount promotions.
The case, brought by Australia’s national consumer and competition regulator, the Australian Competition and Consumer Commission (ACCC), centered on Coles’ widely advertised “Down Down” price promotion campaign that ran across hundreds of grocery and household items between February 2022 and May 2023. The ACCC argued that the so-called discounts were anything but genuine: Coles had strategically hiked product prices temporarily before rolling out the promotional campaign, tricking consumers into thinking they were saving money when no actual discount existed.
On Thursday, Justice Michael O’Bryan – who is also currently presiding over an identical pending case against Coles’ biggest rival, Woolworths – sided fully with the regulator. In his ruling, O’Bryan confirmed that the vast majority of the promotions in question failed to qualify as genuine discounts. Out of 14 representative product samples submitted as evidence during the trial, 13 were found to have misled the average everyday consumer. The only promotion that escaped the ruling was for Nature’s Gift Dog Food, which O’Bryan noted did not display a previous “was” price on its promotional ticket, eliminating the misleading context.
Justice O’Bryan laid out a clear regulatory standard in his written judgement: for a discount referencing a prior higher price to be considered legitimate, the product must have been sold at that higher price for a minimum of 12 consecutive weeks immediately before the promotion launches. “The Down Down tickets for the sample products would not have been misleading if the products had been sold at the ‘Was’ price for a minimum period of twelve weeks immediately preceding the Down Down promotion,” he wrote.
Coles, which had consistently denied all allegations of wrongdoing throughout the proceedings, said in a post-ruling statement that it is currently reviewing the court’s decision. The company emphasized that it has “always been focused on delivering value to our customers”, and added that the ruling underscores “the need for clear, practical guidance on minimum price establishment periods to ensure the retail industry can avoid unnecessary litigation in future”.
The ruling comes amid growing public and regulatory scrutiny of Australia’s two largest supermarket chains, which together control roughly two-thirds of the country’s entire grocery market. Over the past 12 months, both companies have faced widespread accusations of price gouging and anti-competitive behaviour amid a national cost-of-living crisis that has put household grocery budgets under unprecedented pressure. The ACCC has already launched an identical fake discount case against Woolworths, accusing the chain of misleading consumers across 266 products over a 20-month period, with a ruling expected from the same judge later this year.
The size of Coles’ penalties will not be determined until follow-up hearings at a later date, but legal and regulatory experts widely expect the fine to be substantial, sending a strong warning to the retail industry about deceptive pricing practices.