Australian Supermarkets Face Lawsuit Over Alleged Fake Discount Claims
The two largest grocery chains in Australia are being sued by Australia’s consumer watchdog, which claims they made up the fact that they had permanently lowered the cost of hundreds of products.
Coles and Woolworths are accused by the Australian Competition and Consumer Commission (ACCC) of violating consumer law when they raised prices for a brief period of time before decreasing them to a price that was either higher or equal to the original cost.
Woolworths said it would examine the charges, while Coles said it will defend itself against them.
With two thirds of the Australian market, the supermarket behemoths have been under increased scrutiny in the last year due to accusations of price gouging and anti-competitive behavior.
If the allegations of behavior are confirmed, Prime Minister Anthony Albanese declared them to be “completely unacceptable”.
“This does not reflect the spirit of Australia. At a news conference, he disclosed draft legislation for a previously promised “code of conduct” for supermarkets. “Customers don’t deserve to be treated like fools,” he declared.
According to ACCC Chair Gina Cass-Gottlieb, Coles and Woolworths have been promoting their “Prices Dropped” and “Down Down” campaigns for years, and Australian consumers are now aware that these promotions signify a consistent decrease in the ordinary prices of goods.
However, she went on, “the discounts were, in fact, illusory” in many instances.
Following complaints and ACCC monitoring, the watchdog’s inquiry revealed Woolworths had deceived customers about 266 products over a 20-month period, and Coles about 245 products over a 15-month period.
Pet food, Band-Aid plasters, mouthwash, and Australian favorites like Arnott’s Tim Tam biscuits, Bega Cheese, and Kellogg’s cereal were among the things available.
The two businesses “sold tens of millions” of the impacted products, according to the ACCC, and “derived significant revenue from those sales.”
“A lot of shoppers depend on sales to make their grocery budgets go farther, especially in this period of tightening budgets,” Ms. Cass-Gottlieb stated.
After new pricing were announced, it “sought to strike an appropriate balance” between managing that and “offering value to customers” by resuming promotions “as soon as possible.”
The corporation also stated that it “places great emphasis on building trust with all stakeholders” and that it takes consumer legislation “extremely seriously”.
In a response, Woolworths stated that it would discuss the allegations with the ACCC.
“Our customers are telling us they want us to work even harder to deliver meaningful value to them and it’s important they can trust the value they see when shopping our stores.”
The government commissioned an examination of the nation’s current Food and Grocery Code of Conduct in response to mounting criticism of the supermarkets.
