Federal Court rules Coles misled shoppers with ‘Down Down’ discounts

Any doubt that Coles Supermarkets systematically misled customers for years with fake promotional prices was put to rest in the Federal Court today.

In a groundbreaking case brought by the Australian Competition and Consumer Commission (ACCC), the court found that 13 out of 14 examples of Coles’ ‘Down Down’ pricing misled consumers between February 2022 and May 2023.

Penalties and other orders sought by the ACCC have yet to be determined.

The court ruled that the discounts weren’t genuine because the products in question weren’t sold at the previous ‘was’ price long enough to constitute an actual sale. The supermarket simply inflated prices for a short while and then dropped them back down, though sometimes not as low as the original standard prices.

“While the judgement is good news to hold supermarkets accountable for clear, transparent pricing – it reinforces the need for stronger pricing reforms,” says CHOICE director of campaigns Andy Kelly.

“At a time when many households are facing cost of living pressures, it’s more important than ever for consumers to be able to trust that promotions reflect genuine discounts. Hiking prices whilst telling consumers that prices are down has allowed Coles to have its cake and eat it too.”

False and misleading discounts

The tactic of temporarily increasing prices by 15% and then reducing them as part of a ‘Down Down’ promotion was applied to 245 everyday products. The court case involved an agreed list of 12 sample products from the total of 245. (Two of the products were included in a ‘Down Down’ promotion twice.)

The ACCC alleged that the discounts “were illusory and that the representations were false or misleading”, in breach of the Australian Consumer Law.

“The ACCC brought this case in the public interest because we considered that Coles’ pricing practices within its ‘Down Down’ program made it harder for customers to identify genuine value for money while shopping for household essentials,” says ACCC Chair Gina Cass-Gottlieb.

Kelly says the legal win highlights the need for clearer pricing across the supermarket sector.

“We continue to call on the Federal Government to implement the ACCC supermarkets inquiry recommendations in full, by introducing minimum information requirements for price displays and discount promotions, including the previous price of the product, the date range over which that previous price applied, and the percentage of the discount,” Kelly says.

Coles’ ‘Down Down’ promos have been running since 2010. In a parallel case, the ACCC has also taken Woolworths to court for similarly misleading pricing in its ‘Prices Dropped’ promotions. The Woolworths case is ongoing.

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Andy Kollmorgen

Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn

Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn