Grocery
prices had climbed steadily higher through the worst of the cost-of-living
crisis, and 60% of the shoppers we heard from said the they didn’t believe that it was because the supermarkets faced higher costs.
In December
last year, shortly after we delivered our Shonky, Coles agreed to refund thousands
of customers after we caught the supermarket raising prices that it claimed
were ‘locked’.
Price manipulation designed to mislead
Now the
Australian Competition and Consumer Commission (ACCC) is taking the duopoly to
court in separate cases for similar pricing tactics involving the supermarkets’ respective ‘prices dropped’ (Woolworths) and ‘down, down’ (Coles) claims.
“We allege
that Woolworths and Coles breached the Australian Consumer Law by making
misleading claims about discounts, when the discounts were, in fact, illusory,”
says ACCC Chair Gina Cass-Gottlieb.
Promotional labels at the major supermarkets often confuse shoppers, and the frequent changes in prices make it difficult to tell whether there is a genuine discount or not
CHOICE director of campaigns Rosie Thomas
Both
supermarkets are accused of raising prices up to 15% above regular prices and
then dropping them before applying the ‘prices dropped’ and ‘down, down’ labels
– but still leaving prices on the promoted items above or the same as the
regular long-term prices. In other words, these special offers were either the
same or worse than the supermarkets’ regular offers.
“We know
from our extensive work in this area that promotional labels at the major
supermarkets often confuse shoppers, and the frequent changes in prices make it
difficult to tell whether there is a genuine discount or not,” says CHOICE
director of campaigns, Rosie Thomas.
CHOICE is
calling for greater transparency of historical supermarket pricing data.
“Easier access to data on supermarket price changes over time would have made it
much harder for the supermarkets to get away with this kind of behaviour for so
long,” Thomas says.
Tens of millions of misleadingly labelled products sold
The ACCC
investigation found that the misleading conduct occurred both online and
instore, with 266 products sold at Woolworths and 245 sold at Coles at
different times over 20 and 15 months, respectively.
We allege these misleading claims about illusory discounts diminished the ability of consumers to make informed choices about what products to buy, and where
ACCC chair Gina Cass-Gottlieb
The regulator,
which began its investigation based on contacts from consumers and social media
monitoring, estimates that Woolworths and Coles sold tens of millions of
misleadingly labelled products and “derived significant revenue from those sales”.
“We allege
these misleading claims about illusory discounts diminished the ability of
consumers to make informed choices about what products to buy, and where,” Cass-Gottlieb
says.
The ACCC is
seeking penalties in the case as well as community service orders requiring both
supermarkets to fund a registered charity to deliver meals to Australians in
need, in addition to any pre-existing programs.
Andy Kollmorgen is the Investigations editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses.
Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC), and at the Australian Financial Review. Andy is a former member of the NSW Fair Trading Advisory Council.
Andy has a Bachelor of Arts in English from New York University.
Find Andy on Twitter and LinkedIn.
Andy Kollmorgen is the Investigations editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses.
Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC), and at the Australian Financial Review. Andy is a former member of the NSW Fair Trading Advisory Council.
Andy has a Bachelor of Arts in English from New York University.
Find Andy on Twitter and LinkedIn.
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