Asia
Update: Federal Court Rules Against Coles Group on Price Discounts in ACCC Case
(Updates with a statement from Coles in the fifth paragraph and the latest stock move in the last paragraph.)Australia's Federal Court ruled Thursday that Coles Group (ASX:COL) deceived shoppers by advertising discounts on products that, in many cases, were being sold at higher prices, according to multiple same-day media reports.The case against Coles was brought by the Australian Competition and Consumer Commission (ACCC) in 2024. The consumer watchdog also filed similar allegations against Woolworths Group (ASX:WOW), with that lawsuit still pending a verdict.The ACCC said Coles increased prices on certain items for a very short period of time before putting them on a discount, making the promotions illusory in nature. For example, the price of a dog food product sold for AU$4 for almost a year was briefly raised to AU$6 before being discounted to AU$4.50 as part of its "Down Down" price campaign, according to the reports."13 of the 14 'Down Down' tickets that were the subject of consideration in the joint liability trial were misleading because the relevant products were not sold at the 'was' price stated on the ticket for a reasonable period," Federal Court judge Michael O'Bryan reportedly said in his decision.In a statement, Coles said the court found that all price hikes "resulted from supplier cost price increases and were, therefore, commercially justifiable." The case highlights the "need for clear, practical guidance on minimum price establishment periods to ensure the retail industry can avoid unnecessary litigation in future," the company said, adding that it is reviewing the judgment.The company's shares fell nearly 3% in recent Thursday trade.
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