Court rules Coles misled shoppers with its ‘Down Down’ discount campaign
Coles misled Australian shoppers by promoting fake “Down Down” discounts on everyday grocery products, the federal court has ruled in a landmark decision for the supermarket industry,Justice Michael O’Bryan handed down his judgment on Thursday, delivering a significant blow to Australia’s second-largest supermarket chain, which had argued that the discounts represented genuine savings during a period of high inflation,He found the supermarket giant had engaged in misleading conduct, in contravention of the Australian consumer law,The Australian Competition and Consumer Commission sued Coles and its rival Woolworths, accusing the supermarket giants of duping shoppers between 2021 and 2023 by using promotional programs to disguise price increases on hundreds of products,O’Bryan’s verdict in the Coles case – which was heard in February – comes before his decision in a similar trial against Woolworths, which was heard in Sydney in late April and early May and which the judge will rule on later this year.
In the Coles case, the supermarket sold 245 products at one price for a median period of a year, then increased their price for a median of just 28 days, before reducing this to a third price which was more expensive or equal to the first price.The strategy is known as “was/is” comparative pricing: Coles advertised products to shoppers with “Down Down” promotional tickets that displayed their new, supposedly discounted “is” price next to a higher “was” price.But the supermarket did not disclose on the tickets that the “was” prices had been in place for only a short period and that the items had been sold at a cheaper price before that.During the trial, Coles conceded that by the time it raised the price of an item from the original to the “was” price, the supermarket had already planned and agreed with the supplier on what the new “Down Down” price would be.Legal counsel for the supermarket argued that the promotional prices were genuine discounts offered to shoppers after an increase in wholesale costs charged by suppliers during a period of rising inflation.
The trial examined 12 sample products in detail, including Rexona deodorant, Arnott’s Shapes, two-litre bottles of Coca-Cola and Karicare baby formula, and 14 pricing tickets,Reading a summary of his judgment in a Melbourne courtroom on Thursday, O’Bryan agreed the price increases were done in “ordinary commercial way” and Coles had been meeting requests from suppliers,But the judge upheld the ACCC’s allegation that Coles falsely promoted “discounts” on 13 out of 14 promotional tickets based on increased prices that had been available for too short a period,O’Bryan said if the average shopper had known the “was” prices on the tickets had been in place for such a short amount of time, they would not have thought the discounts were genuine,He said 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.
This aspect of his judgment is likely to set a precedent for the supermarket industry – how long a price rise must apply before a discount can be promoted without legal consequence,During the trial, Coles executives were cross-examined about why the supermarket relaxed its own rules – known as guardrails – designed to prevent manipulation of the “Down Down” promotional program,Under Coles’ older guardrails, introduced in 2019, if a product was taken off “Down Down” by reason of a cost price increase, it could not be returned to the “Down Down” program for nine months,In his judgment, O’Bryan said Coles updated the guardrails in January 2022, effectively imposing a “price establishment period” of 12 weeks,This meant Coles was meant to sell products at one regular price for 12 weeks, before they could go on to “Down Down”, to stop the promotional program from being deceptive.
However, as O’Bryan noted in his judgment, the guardrails were wound back in March 2022, meaning Coles effectively reduced the “price establishment period” to four weeks.O’Bryan said Coles relaxed the guardrails in response to competitive pressure from Woolworth that likely brought about a “race to the bottom” in terms of compliance with the Australian consumer law.The judge’s decision means Coles is expected to face penalties but the size of the fine won’t be determined until later court hearings.The ACCC chair, Gina Cass-Gottlieb, said the regulator would seek a “substantial” penalty “reflecting the importance of accurate pricing for consumers”.“It is very important that a penalty is not just able to be dismissed as a cost of doing business, and that it becomes at a level that is a significant deterrent for such conduct,” she told reporters in Sydney following the court judgment.
‘Hold the line’: Burnham tells allies in parliament he still has options to return
Andy Burnham has told Labour MPs they should hold the line and that he has options to return to parliament after several seats identified by his allies failed to materialise.Two seats that backers of the Greater Manchester mayor had described as “nailed on” as recently as Monday night are now out of contention after the MPs concerned got cold feet.Burnham spoke to a number of MPs by phone on Tuesday and assured them that he still intended to seek an imminent return to parliament.The Guardian was told by two MPs on Wednesday that Jeff Smith, who represents Manchester Withington, an affluent suburb of the city, was in talks about stepping aside for Burnham, but his friends denied it. Asked whether he was about to make way, Smith told the Press Association he was not
‘It’s more incrementalism’: Starmer’s safe king’s speech fails to quell mutiny
For Keir Starmer’s Labour critics, his second king’s speech, in which the government set out what it would do in parliament over the next 12 to 18 months, was a crystallisation of everything that was wrong with the prime minister’s strategy.Over 34 bills and three draft ones, Starmer set out a programme he said would “make this country stronger and fairer”. But the package, which included limiting trial by jury, reshaping the NHS and moving the country closer to the EU, fell short of what some in the prime minister’s party feel is needed to win back voters’ trust.“Most of this is incrementalism,” said one Labour MP. “This sums up where we have gone wrong in the first two years in government
Starmer has ‘full confidence’ in Streeting despite health secretary’s allies saying he is planning to resign – as it happened
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As an active and loyal Labour member, I am infuriated by what is happening within the party (Burnham allies warn against quick ‘coronation’ of Streeting if Starmer quits, 12 May). The ongoing circus about the leadership is a terrible distraction from the numerous global and national issues that the government and the prime minister should be focused on. But the most infuriating aspect of the entire shambles is the relentless speculation and briefings from so-called “allies” of Andy Burham.No Labour member has an innate right to be selected as a parliamentary candidate. The assertion that a sitting Labour MP should give up the seat voters elected them to, necessitating a byelection so that Burnham can run, then assuming that he would automatically retain the seat, is arrogance beyond belief
Labour lost the vote of small business owners like me | Letter
Your report (Reform wins across northern England overturn decades of Labour control, 8 May) touched on Labour losing support among small business owners. I wanted to offer the perspective of a small independent business owner who has traditionally supported Labour.Labour’s poor local election results may reflect a growing frustration among small business owners who no longer feel recognised as “working people”. In hospitality, hair and beauty, retail and trades, there are thousands upon thousands of us keeping local economies alive while taking home increasingly modest incomes ourselves.Last year, our small independent restaurant in Margate turned over roughly £350,000
King’s speech might be the last word on Starmer as reluctant monarch does his duty | John Crace
The king looked fed up. His attempts to throw a sickie had come to nothing. Did the government really want to go ahead with the state opening? Apparently it did. Would it be OK if he phoned it in? He fancied a day working from palace. It wouldn’t be OK
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