The Federal Court has found Coles misled customers with “illusory” discounts.
The Australian Competition and Consumer Commission (ACCC) filed the case against Coles using examples from its “Down Down” promotion.
A parallel trial against Woolworths is ongoing.
The consumer watchdog alleges both retailers “derived significant revenue” from selling “millions” of deceptively priced products.
Background
Coles and Woolworths control around two-thirds of the supermarket sector.
In the 2025/26 financial year, Coles reported a net profit of $1.1 billion.
In September 2024, the ACCC announced it was suing both major supermarkets in separate lawsuits.
The ACCC analysed the price of hundreds of Coles grocery items from February 2022 to May 2023, and accused the supermarket of using misleading pricing across 245 products.
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Claims
The ACCC accused Coles of “price spiking” certain products – increasing the price briefly before reducing it to a cost that is more expensive, or the same as, before the spike.
Coles sold Strepsils Honey & Lemon Lozenges for $5.50 for around two years. It increased the price to $7 in October 2022.
The next month, the Strepsils were advertised with the supermarket’s “Down Down” discount label for $6.00 – $0.50 higher than the original price.
Judgment
On Thursday morning, the Federal Court agreed with the ACCC that its evidence showed “the discount represented on the tickets was not genuine”.
“In offering the sample products on those ‘Down Down’ tickets, Coles engaged in conduct in trade or commerce that was misleading... and made a misleading representation with respect to the price of the sample products,” Judge Michael O‘Bryan said.
The ruling opens the door for Coles to face significant financial penalties.
