Allegations that Coles deceived customers with "illusory" discounts on 245 products will be put to the test this week, with a significant case kicking off in the Federal Court.
The Australian Competition and Consumer Commission (ACCC) alleges that Coles' Down Down campaign misled customers about the pricing of 245 products between February 2022 and May 2023.
Coles, which faces significant fines if it loses the case, has strongly denied the claims.
The ACCC launched the case in September 2024, alongside a separate proceeding against Woolworths, alleging that both had violated consumer law by misleading shoppers on hundreds of popular supermarket items with their Down Down and Prices Dropped campaigns.
The watchdog alleged that both supermarket giants increased the prices of hundreds of products before dropping them to prices that were lower than the inflated prices but still higher than the regular price that applied before the price spike.
When announcing the lawsuit, the ACCC said Woolworths and Coles had sold tens of millions of the allegedly misleadingly discounted goods and derived "significant revenue" from these sales.
Among the 245 products related to the case against Coles are Arnott's Shapes biscuits, Band-Aids, Cadbury chocolates, Colgate toothpaste, Danone yoghurt, Dettol multi-purpose wipes, Fab laundry liquid, Kellogg's snack bars, Kleenex tissues, Maggi two-minute noodles, Palmolive shampoo, Sakata rice crackers, Sanitarium Weet-Bix cereal, Strepsils lozenges, and Whiskas cat food.
ACCC chair Gina Cass-Gottlieb said in September 2024 that the discounts were not only "illusory" but pre-planned.
"We also allege that in many cases both Woolworths and Coles had already planned to later place the products on a Prices Dropped or Down Down promotion before the price spike, and implemented the temporary price spike for the purpose of establishing a higher 'was' price," Cass-Gottlieb said.
In a statement released at the time, Coles said the initial price rises occurred because "Coles was receiving a large number of cost price increases from our suppliers and, in addition, Coles' own costs were rising, which led to an increase in the retail price of many products".
"Coles sought to strike an appropriate balance between managing the impact of cost price increases on retail prices and offering value to customers through the recommencement of promotional activity as soon as possible after the establishment of the new non-promotional price," Coles company secretary Daniella Pereira said in a statement.
Woolworths also rejected the allegations, with a spokesperson saying at the time that "the suggestion is that Woolworths initiated temporary price spikes and that's not correct factually".
What penalties could Coles face?
Among other demands, the ACCC is seeking a declaration of wrongdoing by Coles and financial penalties.
While the precise amount Coles could be fined remains unclear, fines previously levied on corporations found to have misled customers can be significant.
In September 2025, the Federal Court ordered Optus to pay a $100 million fine after the ACCC launched a case over sales tactics targeting hundreds of vulnerable customers, including First Nations Australians.
A year earlier, Qantas was slapped with a $100 million penalty for selling tickets for flights it had already decided to cancel.
The Coles Group reported a net profit after tax of over $1 billion for the 2024-2025 financial year, meaning that a fine similar to that levied on Qantas or Optus would take a roughly 10 per cent chunk out of the company's annual profits.
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