Australian Competition Regulator Files Lawsuit Against Woolworths and Coles Over Discount Claims

Australia’s competition regulator has announced that it has initiated legal proceedings against major supermarket chains Woolworths Ltd and Coles Group for allegedly misleading customers regarding price discounts.

The Australian Competition and Consumer Commission (ACCC) has claimed that both companies falsely advertised discounts on “hundreds” of supermarket items by initially inflating prices before categorizing those products as discounted at prices similar to their earlier rates.

Woolworths utilized a promotion called “prices dropped,” while Coles employed a campaign named “down down.”

ACCC Chair Gina Cass-Gottlieb stated, “Both Woolworths and Coles have breached the Australian Consumer Law by making misleading claims about discounts, which were, in fact, illusory.”

Following an investigation, the regulator found violations related to various everyday products, including chocolates, soft drinks, and household goods.

While it remains unclear how much the ACCC is seeking in fines, the maximum penalty for each breach of consumer law could be as high as A$50 million (approximately $34 million).

Woolworths and Coles have experienced a decline in earnings in recent years, primarily due to Australian consumers tightening their budgets amid rising inflation and interest rates. This economic environment has led shoppers to be more conscious of their spending.

Woolworths and Coles were not immediately available for comment.