ACCC Takes Action: Coles and Woolworths Accused of Misleading Shoppers. The ACCC takes on supermarket giants, protecting Australian shoppers from price hikes.
In a bold move to protect Australian consumers from price manipulation, the Australian Competition and Consumer Commission (ACCC) has launched legal action against supermarket giants Coles and Woolworths. This comes after allegations that both companies misled customers with misleading discount campaigns, artificially inflating the prices before offering so-called “discounts” through their popular “Price Drop” and “Down Down ” promotions. Prices increased.
Prime Minister Anthony Albanese expressed his concern over the impact of such practices on Australian families, announcing that his government was taking further steps to protect shoppers. A new mandatory food and grocery code of conduct is coming, which aims to hold retailers accountable for any violations of consumer trust.
Allegation: “illusory” exemption
The ACCC alleges that Woolworths and Coles temporarily increased the prices of hundreds of products by at least 15% before placing them on their respective promotional campaigns. The watchdog claims this deceptive practice was intended to create the illusion of significant discounts. Between September 2021 and May 2023, Woolworths is accused of raising the prices of at least 266 products, while Coles allegedly raised the prices of 245 products.
For example, the price of a family pack of Oreos at Woolworths reportedly increased from $3.50 to $5.00, which was then “discounted” to $4.50 as part of their “price drop” promotion. A similar practice was seen with Coles’ Strepsils Throat Lozenges, where the price was raised from $5.50 to $7.00, and then “discounted” to $6.00 as part of their “Get Down” campaign.
This strategy allegedly violated consumer confidence, as the prices that buyers saw as “discounted” were actually either higher or the same as previous prices. The ACCC argues that these promotions were designed to deceive customers into thinking they were getting a better deal.
Government response: Mandatory code of conduct
In light of these allegations, Prime Minister Anthony Albanese has taken a strong stance, expressing his government’s commitment to protecting Australians from unfair price increases. The existing voluntary Food and Grocery Code of Conduct, which was intended to promote goodwill among retailers, has been found inadequate in curbing such practices. Albanese’s proposed mandatory code aims to hold supermarkets and other major retailers, such as Aldi and Metcash, accountable through strict rules.
The new law will introduce significant penalties for any serious breach of the mandatory code. Retailers could face millions of dollars in fines if they fail to comply with the new standards.
In addition to these penalties, the ACCC is pushing for community service orders. This would require Coles and Woolworths to fund charitable programs that deliver food to Australians in need, further emphasizing the ethical responsibility of these corporations.
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