The Australian Competition and Consumer Commission has launched a high-stakes legal battle against Coles (ASX:COL) in the Federal Court, alleging the supermarket giant engaged in "utterly misleading" conduct during its iconic "Down Down" discount campaign.
Between February 2022 and May 2023, the watchdog claims Coles artificially inflated the prices of 245 products for brief periods—often less than a month—before "dropping" them to a price that was still higher than or equal to the original long-term cost.
During the trial's opening in Melbourne, ACCC barrister Garry Rich SC presented evidence of "price spiking," highlighting a 1.2kg container of dog food that sat at $4 for nearly a year.
The price was hiked to $6 for a mere seven days before being advertised as a "Down Down" bargain at $4.50.
While technically a reduction from $6, the ACCC argues this was not a "fair dinkum" discount, as consumers were never informed the $6 price was a temporary spike.
Coles is defending the action, citing a period of record-high inflation and rising wholesale costs as the primary drivers for price adjustments.
The supermarket maintains that the pre-promotion prices were genuine shelf prices and denies making false representations about "regular" costs.
With 12 "sample products"—including toothpaste and Rexona deodorant—under scrutiny, the case is expected to run for ten days.
At the time of reporting, Coles’ share price was $22.06.