Woolworths And Coles Blame Suppliers For Price Hikes Amid Federal Court Battle

Supermarket giants Woolworths and Coles have attributed price hikes on products to requests from their suppliers, who reportedly sought increases to cover rising costs, while asserting that the discounts offered were "genuine."

Australia's two largest grocery chains appeared separately before the Federal Court on Wednesday in response to a lawsuit filed last month by the Australian Competition and Consumer Commission (ACCC), which alleged they had breached consumer law regarding hundreds of common products through their "Down Down" and "Prices Dropped" campaigns.

John Sheahan KC, representing Coles, stated his client will show the prices were hiked as per requests from suppliers to adjust prices in response to a "sudden outbreak of high inflation." He emphasized that the "ultimate discounted price" should be assessed in relation to the actual cost increases of the products, The Guardian reported.

Meanwhile, Cameron Moore, who appeared for Woolworths, said the case was "misconceived," and denied the allegation that the supermarket initiated temporary price spikes.

"Any price increases were initiated by suppliers ... in response to rising costs," he said. "The suggestion is that Woolworths initiated temporary price spikes and that's not correct factually. We say factually, the ACCC's case is misconceived."

The ACCC has filed new legal documents outlining the scale of the promotional activities, which reportedly involve numerous items priced over 30% higher than their regular price, but were promoted as discounts.

According to the ACCC's list of affected products, consumer violations span nearly all items from snacks, pantry items, coffee, soft drinks, cosmetics to pet food.

Listing 276 promotional items at Woolworths and 255 at Coles, ACCC's new documents detail how the two supermarkets temporarily raised prices before advertising them as discounts.

For instance, Woolworths sold Arnott's Tim Tams at AU$4.50 for 617 days, which the ACCC identifies as the product's "regular price." The price was raised to AU$6 for 21 days before being promoted at AU$5.50. While shoppers were led to believe they were getting a discount, the new price actually reflected a 22% increase over the regular price, according to ACCC's analysis.

Coles sold a variety of L'Oréal anti-wrinkle moisturizers for an extended period at AU$15, as stated in the court documents. However, they then raised the price to AU$24 for four weeks and later included the products in discount promotions at AU$18, which was still 20% higher than the regular price.

ACCC also alleged Coles sold MasterFoods marinade at a 33% increase during its discount promotions.

Sheahan stated that the case was more complex than the ACCC's allegations and that any outcome will impact the entire industry, ABC News reported.

"It's significant in terms of it its implications for the whole industry, for the suppliers, for the retailers and the consumers," he said.

The two supermarkets have to submit their responses by Nov. 29 and return to the Federal Court in December for another case management hearing.