It is an uncomfortable time to run a business in the retail food industry as Australian politicians of all stripes apply a big stick to supermarkets to fuel their own political success. While Coles and Woolworths face prosecution by the Australian Competition and Consumer Commission (ACCC), Labor Prime Minister Anthony Albanese blames them for high levels of inflation and opposition parties plot to break the biggest players up.
The ACCC prosecution claims that Coles and Woolworths deliberately misled shoppers into believing they were getting a saving on about 260 lines through Woolworths’ price drop and Coles’ down down campaigns across a period from September 2021 and May 2023 (for Woolworths) and February 2022 to May 2023 (for Coles). The accusation is that the products were left at a long-term regular retail prices which subsequently increased, then were reduced to a smaller long-term discount 28 days later; still higher than the previous regular retail price. The ACCC alleges that the discounts on these products were “illusory” and therefore constitute a false or misleading representation to consumers. Should the ACCC’s prosecution of the big two succeed, each could face fines of $50 million or three times the value of a ‘reasonably attributable’ benefit obtained or 30 per cent of the corporation’s adjusted turnover during the breach period, whichever is the greater.
