Australian Supermarket Coles Found Guilty of Fake Discount Scheme

Australia’s federal court has ruled that supermarket giant Coles misled consumers with fake discounts, BBC Business reported Thursday. The landmark decision opens the company to potentially substantial financial penalties.

The “Down Down” Deception

The country’s consumer watchdog, the Australian Competition and Consumer Commission (ACCC), brought the case against Coles over its well-known “Down Down” promotional campaign. The regulator argued the discounts were fraudulent. It said Coles had temporarily inflated prices on hundreds of products before presenting them as marked-down deals.

Justice Michael O’Bryan agreed, ruling the discounts were “not genuine.” He examined 14 sample products submitted as evidence. He found 13 of them would have misled an ordinary consumer. The only exception was a Nature’s Gift Dog Food product. That item escaped scrutiny because its promotional ticket did not include a prior “was” price.

O’Bryan set out a clear threshold for what constitutes a legitimate discount. A product must have been sold at the higher price for at least 12 consecutive weeks before a promotional offer can be considered real.

Background: A Year of Scrutiny for Australia’s Big Two

Coles and rival Woolworths together control roughly two-thirds of Australia’s supermarket market. Both chains have faced intensifying regulatory and public pressure over the past year. Allegations of price gouging and anti-competitive behaviour have drawn sustained attention from lawmakers and consumer groups alike.

The ACCC has also launched a parallel case against Woolworths. That action covers alleged misleading pricing across 266 products over a 20-month period. A ruling in that matter is expected later in 2026. Justice O’Bryan is presiding over both cases.

Coles Responds, Penalties Pending

The ACCC’s case centred on 245 products ranging from toothpaste to biscuits. The alleged misconduct spanned 15 months between early 2022 and mid-2023. Coles had previously denied the allegations.

Following the ruling, Coles said it was reviewing the judgment. The company added its focus had always been on delivering value to customers. It also called for clearer industry guidance on minimum price establishment periods to reduce future litigation.

The scale of any financial penalty has not yet been determined. That will be decided at separate hearings. Given the scope of the conduct and the number of products involved, analysts expect any fine to be significant.

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