Federal Court Rules Coles' 'Down Down' Discounts Were Not Genuine

Coles ran its "Down Down" promotion from February 2022 to May 2023, advertising lower prices on everyday items such as toothpaste and biscuits. The Australian Competition and Consumer Commission (ACCC) argued that the supermarket had temporarily raised prices before applying the discount, making the savings illusory. Justice Michael O'Bryan examined the case and agreed that the offers did not meet the legal test for a genuine discount. The ACCC has also launched a similar case against Woolworths, accusing it of misleading customers about 266 products over 20 months, with a decision expected later this year.

For a discount to be considered genuine, the product must have been sold at the higher "Was" price for at least twelve weeks immediately before the promotion. Over the fifteen‑month period, Coles applied the "Down Down" label to 245 different products. In reviewing fourteen sample items, the judge found that thirteen failed to meet the twelve‑week rule and would have misled an ordinary shopper; only one product, Nature's Gift Dog Food, displayed no "Was" price and was therefore not deemed misleading. The judge noted that the short‑term price increases were often just a few days long, insufficient to establish a legitimate baseline for the discount.

The ruling confirms that Coles violated consumer‑protection law by presenting false savings, exposing the retailer to possible fines and reputational damage. It also signals to other retailers that temporary price hikes followed by discounts will be scrutinized under the same twelve‑week requirement. Coles said it is reviewing the judgment and reiterated its commitment to delivering value, while the ACCC indicated it will pursue a similar case against Woolworths later this year. Coles urged regulators to issue clear, practical guidance on minimum price establishment periods to help retailers avoid future litigation.

The court will determine the financial penalty for Coles, and the outcome of the parallel Woolworths case will clarify whether the practice is widespread across the sector. Coles said it is reviewing the judgment and may consider an appeal, though it has not yet announced any formal action.