Australia’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), is suing the country’s two largest supermarket chains, Coles and Woolworths, over allegations of misleading pricing practices.
BBC reported that the ACCC claims both supermarkets falsely advertised permanent price reductions on hundreds of products, while temporarily raising prices before lowering them to the same or higher than the original cost.
Coles has stated it will defend itself against the accusations, while Woolworths said it is reviewing the claims.
Together, the two chains dominate nearly two-thirds of the Australian grocery market and have faced increasing scrutiny over alleged price gouging and anti-competitive behavior.
Prime Minister Anthony Albanese called the alleged conduct “completely unacceptable” if proven true.
“This is not in the Australian spirit. Customers don’t deserve to be treated as fools,” he said, while unveiling draft legislation for a new code of conduct aimed at supermarkets.
ACCC chair Gina Cass-Gottlieb highlighted that Coles and Woolworths have spent years promoting campaigns like ‘Prices Dropped’ and ‘Down Down,’ which consumers believe represent long-term reductions in regular prices. However, many of the discounts were “illusory,” she said.
An ACCC investigation, initiated by complaints and its own monitoring, found that Woolworths misled customers on 266 products over 20 months, while Coles did the same for 245 products over 15 months.
The products ranged from pet food and Band-Aids to Australian staples like Tim Tam biscuits, Bega cheese, and Kellogg’s cereal.
The ACCC estimates that tens of millions of these products were sold, generating significant revenue for both companies.
“Many consumers rely on discounts to stretch their grocery budgets, especially during the current cost of living crisis,” Ms. Cass-Gottlieb said. “It is critical that Australian consumers can trust the accuracy of pricing and discount claims.”
The ACCC is seeking substantial penalties from the Federal Court of Australia and wants both companies to increase their charitable meal delivery programs.
In response, Coles said it had to raise prices due to rising costs but resumed promotions as quickly as possible. Woolworths said it would engage with the ACCC and emphasized the importance of delivering value that customers can trust.
As part of a broader crackdown on supermarket practices, the government has commissioned a review of the Food and Grocery Code of Conduct. The review recommended a stronger, mandatory code to protect suppliers and consumers, with hefty fines for violations.
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