Consumer watchdog zeroes in on Woolworths’ allegedly fake discounts as it meets supermarket giant in court

The Woolworths hearings come at a time of significant economic upheaval and widespread consumer concern. Photograph: Joel Carrett/AAP View image in fullscreen The Woolworths hearings come at a time of significant economic upheaval and widespread consumer concern. Photograph: Joel Carrett/AAP Consumer watchdog zeroes in on Woolworths’ allegedly fake discounts as it meets supermarket giant in court Vinegar, Tim Tams and baby rice are among the products to be scrutinised in the Australian Competition and Consumer Commission’s case Get our breaking news email, free app or daily news podcast The consumer watchdog is back in court and taking on Australia’s largest supermarket chain, alleging Woolworths deliberately misled shoppers with fake discounts. The Australian Competition and Consumer Commission’s (ACCC) case against Woolworths begins in the federal court in Sydney on Tuesday, almost two months after hearings wrapped up in its very similar case against Coles. This time, rice crackers, Tim Tams, apple cider vinegar, pasta and Oreos are among the everyday groceries whose shifting shelf prices will be scrutinised over a fortnight. The ACCC alleges Coles and Woolworths broke Australian consumer law by offering “illusory” discounts on hundreds of everyday products through the misleading use of their respective “Down Down” and “Prices Dropped” promotion programs. Led by Robert Yezerski, SC, Woolworths’ legal team is expected to vigorously defend the allegations, with the supermarket saying it “fundamentally disagrees” with the ACCC’s claims and at no stage misled or deceived customers. “Following COVID, there was a period of extraordinary inflation, and we were acutely aware that customers expected Woolworths to provide value wherever possible,” a Woolworths spokesperson said. “Inflation also put pressure on our suppliers’ costs, and we worked with them to reduce the inflationary impact on customers through our ‘Prices Dropped’ program.” The Woolworths hearings come at a time of significant economic upheaval and widespread consumer concern about the cost of living amid a fresh bout of inflation and the prospect of more interest rate rises. The major supermarkets are also facing requests from suppliers to raise prices to help farmers cover drastically inflated fuel and fertiliser costs caused by the Iran" class="entity-link entity-event" data-entity-id="38678" data-entity-type="event">US-Israel war on Iran. The ACCC launched the litigation against Coles and Woolworths in 2024 after a period of sharp grocery price increases and with the major supermarkets suffering reputational damage after being the focus of a string of parliamentary inquiries. While Justice Michael O’Brien is yet to hand down a decision in the Coles matter, the ACCC is expected to make a similar argument in its case against Woolworths. The ACCC alleges that, between September 2021 and May 2023, Woolworths temporarily increased the prices of at least 266 different products before placing them on “Prices Dropped” promotions at prices which were higher than, or the same as, their prices before the price spike. The ACCC and Woolworths have narrowed the list of products to be examined by the court down to 12: Family packs of Arnott’s Tim Tams and variety packs of Tiny Teddies, Bragg apple cider vinegar, Carmen’s fruit and nut muesli bars, Woolworths’ own brand penne pasta, Fab “fresh blossoms” laundry powder, Kleenex aloe vera tissues, Lucky Dog bones, Nestlé Cerelac baby rice, family packs of Oreos, Sakata plain rice crackers and Stayfree ultrathin night sanitary pads. The ACCC alleges Woolworths had planned “in many cases” to later place the affected product on a “Prices Dropped” promotion after the temporary price spike. The strategy is known as “was/is” comparative pricing. Coles conceded during its own case that, by the time it raised the price of an item from the original to the spiked price, the supermarket had already planned and agreed with the supplier on what the third “Down Down” price would be. However, Coles denied misleading shoppers, arguing that the promotional prices were genuine discounts offered to shoppers after an increase in wholesale costs charged by suppliers during a period of rising inflation. Explore more on these topics Consumer affairs Economics Woolworths news Share Reuse this content