The Australian Competition and Consumer Commission (ACCC) has launched a Federal Court case against Coles, alleging the supermarket giant engaged in a “planned” campaign to mislead customers with illusory discounts, a court heard Monday.
The ACCC alleges Coles artificially inflated prices for at least 245 common household products before offering them at discounted rates under its “Down Down” promotion, deceiving shoppers into believing they were receiving genuine savings. The case, described by a former ACCC boss as “the case of the century,” centers on pricing practices between February 2022 and May 2023.
Garry Rich SC, counsel for the ACCC, presented the court with an example involving Nature’s Gift wet dog food. According to Rich, Coles sold 1.2kg cans of the dog food for $4 for 296 days, then briefly increased the price to $6 for seven days before offering it at $4.50 under the “Down Down” promotion, advertised as a reduction from $6. Rich argued that while the $4.50 price was “literally true” as a discounted price, it was “utterly misleading” because it did not represent a genuine reduction from the typical price consumers had previously paid.
“A consumer who knew the real facts would not think the price of the dog food had gone down,” Rich told the court. “Nor would they think the price of $4.50 was a genuine reduction or discount.”
The ACCC’s claim rests on the practice of “was/is” comparative pricing, where a temporary price increase establishes a higher “was” price against which a subsequent discount is measured. The consumer watchdog alleges Coles repeatedly deceived customers by disguising price increases as discounts, leading shoppers to believe they were benefiting from genuine savings when, in many instances, the discounted price was the same as, or higher than, the regular price before the temporary inflation.
Coles is defending the allegations, arguing that price changes were a response to increased costs from suppliers. The ACCC contends that Coles deliberately spiked retail prices higher than necessary, then reduced them to a “new regular price” while presenting the reduction as a discount. The case is expected to scrutinize Coles’ internal compliance documents related to the “Down Down” program, which have reportedly shown key changes to policy guardrails before the alleged misleading conduct began.
The legal battle comes amid a period of renewed inflationary pressure in Australia. The Consumer Price Index rose 3.8% in the 12 months to December 2025, up from 3.4% the previous month, with spending on food and non-alcoholic beverages contributing significantly to the overall increase.
The ACCC is seeking substantial penalties and community service orders against Coles. The outcome of the case is likely to have significant ramifications for a similar, forthcoming case the ACCC is pursuing against Woolworths, Australia’s other major supermarket chain, which controls two-thirds of the Australian grocery market alongside Coles.
The 10-day trial before Justice Michael O’Bryan is ongoing.
