A Federal Court judge ruled Thursday that supermarket giant Coles misled shoppers with fake discounts in its “Down Down” pricing promotions.
The decision marks a significant legal defeat for the retailer, as the court found the company breached Australian consumer law by presenting non-genuine savings to the public.
Judge Michael O'Bryan delivered the judgment in the Federal Court of Australia in Sydney. The court concluded that the discounts offered to consumers were not genuine and therefore misled shoppers [1, 2]. This finding establishes that the company violated consumer protection legislation by manipulating how it advertised price reductions [1, 2].
"The discounts were not genuine," O'Bryan said [2].
The ruling follows a legal battle initiated by the Australian Competition and Consumer Commission (ACCC). The court's determination focuses on whether the advertised “Down Down” prices represented a real decrease from a previous, genuine price, or were merely a marketing tactic to create a false impression of value [1, 2].
Coles now faces significant financial consequences. The company could be subject to penalties reaching up to nine figures [3]. This potential fine comes as the retailer manages an annual revenue of $28 billion [3].
The court's decision underscores the strict requirements for retailers when claiming price drops. Under Australian law, a discount must be based on a price that was actually charged for a reasonable period before the sale began. The judge found that Coles failed to meet this standard in the disputed promotions [1, 2].
“"The discounts were not genuine."”
This ruling sets a rigorous precedent for the Australian retail sector regarding 'was/is' pricing. By penalizing a major player like Coles, the court is signaling that aggressive promotional marketing cannot override the legal requirement for genuine price reductions, likely prompting other supermarkets to audit their discounting strategies to avoid similar litigation.
