ACCC v Coles: A Landmark Case in Consumer Protection

On 14 May 2026, the Federal Court of Australia found that Coles Supermarkets Australia Pty Ltd (Coles) made false or misleading representations about the prices of products, in contravention of sections 18(1) and 29(1)(i) of the Australian Consumer Law (ACL).

Background

The Australian Competition and Consumer Commission (ACCC) commenced proceedings against Coles in September 2024, alleging that it made false or misleading representations about the prices of 245 products (affected products). Separately, a class action was also brought against Coles in relation to those products. The Federal Court previously ordered that liability in both proceedings be determined jointly.

The allegations concerned Coles’ ‘Down Down’ promotional pricing tickets, which advertised discounted prices against a ‘Was’ price. It was alleged that Coles temporarily increased the prices of the affected products by at least 15% for a relatively short period before including those products in its Down Down promotion at prices that were the same as, or higher than, the original prices. The ACCC argued that the discounted prices were not genuine and were therefore false or misleading.

Key issues

The Court considered a sample of 14 affected products and accepted that the Down Down tickets conveyed to ordinary consumers that Coles had discounted the price of those products from the ‘Was’ price and that the discount was genuine.

To determine whether consumers had been misled, Justice O’Bryan considered, in relation to the sampled products:

1. the reason/s for the price increase prior to inclusion in the Down Down promotion
2. the extent of the price increase
3. the number of products sold at the ‘Was’ price
4. how long the products were sold at the ‘Was’ price

His Honour concluded that:

1. the price increases were due to increases in supplier costs and were commercially justifiable
2. the increased prices were not ‘artificially high’
3. products were sold at the ‘Was’ price in the ordinary course of business and in commercial volumes
4. products were generally sold at the ‘Was’ price for four weeks, which, having regard to the matters below, was not a reasonable period

In determining what constituted a reasonable period, the Court considered several matters, including a previous internal policy requiring a product to be sold at a particular price for 12 weeks before that price could be advertised as a ‘Was’ price on a Down Down ticket. Notably, that policy had been relaxed due to perceived competitive pressure from Woolworths.

The Court considered that if an ordinary consumer were told a product had been sold at the ‘Was’ price for less than 12 weeks, they would not regard the discount as genuine.

Decision

The Court ultimately found that 13 of the 14 sampled Down Down tickets were misleading because the ‘Was’ prices displayed on the promotional tickets were not maintained for a reasonable period and did not accurately represent the previous prices of the products. As a result, the discounts represented were not genuine and were misleading.

The only sampled Down Down ticket found not to be misleading did not include a ‘Was’ price.

Penalties and other orders sought by the ACCC, as well as compensation sought separately in the class action, are yet to be determined by the Federal Court, although it is anticipated that the amounts involved will be substantial.

Impact for businesses

The judgment serves as an important reminder for businesses to maintain transparency and accuracy in their marketing practices. Businesses should review their promotional strategies and internal policies to ensure strict compliance with the ACL.

If you are unsure about your obligations, please contact us.