An Australian federal court has ruled that supermarket giant Coles misled shoppers by advertising fake discounts through its well-known 'Down Down' promotion. Justice Michael O'Bryan found that 13 out of 14 sample products did not represent genuine savings, as prices were not maintained at the 'was' price for a minimum of 12 weeks.
Key Takeaways
An Australian federal court ruled that Coles misled customers by advertising fake discounts through its 'Down Down' promotion. Justice Michael O'Bryan found that 13 out of 14 sample products did not represent genuine savings, as prices were not maintained at the 'was' price for a minimum of 12 weeks.
- Court rules Coles misled shoppers with fake discounts
- ACCC sued Coles over promotional practices
- Coles faces potential fines exceeding $200m
- Case raises questions about industry standards for 'was' prices
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▼Source Claims Check
1 Difference FoundAll 5 publishers report consistent facts across 2 key claims. 1 point of difference noted.
| Claim | Status | Reason | |
|---|---|---|---|
| Price Maintenance Period | 1 Difference | Majority reports Coles reduced required maintenance period; others focus on non-maintenance | ▼ |
| Coles Fake Discounts | Broad Agreement | Coles misled shoppers with 'Down Down' promotion | |
| Potential Fines | Broad Agreement | $200m+ potential fine for Coles |
Price Maintenance Period
▼Majority reports Coles reduced required maintenance period; others focus on non-maintenance
Coles Fake Discounts
Broad AgreementColes misled shoppers with 'Down Down' promotion
Potential Fines
Broad Agreement$200m+ potential fine for Coles
This analysis is AI-generated and may not perfectly represent each source's reporting. Always read the original articles for full context.
According to The Guardian, the court case revealed how Coles tampered with its internal 'guardrails' in late 2021 and early 2022, reducing the required period for maintaining the 'was' price from 12 weeks to just four weeks. This change was driven by price increase requests from suppliers and competitive pressure from rival Woolworths.
The Australian Competition and Consumer Commission (ACCC) had sued Coles over its promotional practices, arguing that the supermarket temporarily raised prices before advertising discounts. The court agreed, with Justice O'Bryan stating that '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 12 weeks immediately preceding the “Down Down” promotion.'
Coles has said it is reviewing the judgment and considering its next steps. The ruling could result in significant penalties for Coles, with the ACCC seeking substantial fines to deter similar conduct in the future. The case also raises questions about whether 12 weeks will become a standard timeframe for establishing 'was' prices in the broader industry.
The decision has left all Australian retailers on notice to ensure their discounts are genuine, according to Rod Sims, former head of the consumer watchdog. Prof Allan Fels, another former chair of the ACCC, said he believed Woolworths would be watching the case closely and that other supermarket companies would probably fall in line with the 12-week timeframe to avoid a court case of their own.
Coles faces significant fines and lost $630m in market value following the ruling. The ACCC chair, Gina Cass-Gottlieb, said on Thursday the watchdog would seek a substantial penalty as it consults with Coles ahead of a separate court hearing. Each individual misleading promotion could attract a maximum penalty of $50m but the record penalty for a breach of Australia’s consumer law was $125m, issued to Volkswagen in 2019 for deceiving customers over diesel emissions.
How this summary was created
This summary synthesizes reporting from 5 independent publishers using AI. All sources are cited and linked below. NewsBalance is a news aggregator and media literacy tool, not a news publisher. AI-generated content may contain errors or inaccuracies — always verify important information with the original sources.