Woolworths And Coles Face ACCC Lawsuit Over Alleged False Discount Claims

Australia's largest supermarket chains, Woolworths and Coles, are in hot water after the consumer watchdog Australian Competition and Consumer Commission (ACCC) launched a lawsuit alleging that the food retailers misled the customers with false discount claims, amid a steep economic downturn.

The duopoly, controlling two-thirds of the country's grocery sales, was under scrutiny for maintaining high-price labels when customers were struggling with rising interest rates and for allegedly fostering a culture of competition among fruit and vegetable farmers, to exploit them financially for their benefit, Reuters reported.

The ACCC also brought up allegations that the supermarkets, apart from the deceptive pricing practices, inflated prices on certain products, only to advertise them as "on sale" at a higher price than the original, affecting millions of units.

ACCC Chair Gina Cass-Gottlieb deemed the discounts "illusory" and misleading, as the commission sought unspecified penalties, potentially up to A$50 million or 30% of turnover, for breaches of consumer law.

Cass-Gottlieb said that Coles' "Down Down" and Woolworths' "Prices Dropped" promotions have created a false impression among Australian consumers. Initially, these promotions suggested that prices were being permanently reduced, but the ACCC said the prices artificially inflated before being "dropped."

"Many consumers rely on discounts to help their grocery budgets stretch further, particularly during this time of cost of living pressures," Cass-Gottlieb said. "It is critical that Australian consumers can rely on the accuracy of pricing and discount claims."

Reacting to the scrutiny, Prime Minister Anthony Albanese said the conduct of the supermarket chains, if proven to be true, was "completely unacceptable," BBC reported. "This is not in the Australian spirit. Customers don't deserve to be treated as fools."