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TRANSCRIPT
The slogan sounds simple enough.
JINGLE:“Down, down, the prices are down.”
But supermarket chain Coles is now defending its discounting practices in the Federal Court.
The Australian Competition and Consumer Commission alleges Coles danced with the truth in how it priced household goods.
Coles claims the promotions it offered were genuine, and prices were influenced by inflationary pressures.
“This is the case of the century.”
Allan Fells is a former chair of the ACCC.
“It affects millions of Australian consumers and households in hundreds of stores around Australia on essential goods and services and groceries.”
He says Coles could face hundreds of millions in fines, as well as enormous reputational damage; even the possibility of a class action.
“In some ways, it's complex. In other ways, it's a question simple of whether Coles has been fair dinkum, whether all those apparent price reductions that we see daily are true ones, or whether they just put the price up for a brief time, took it back to the original level, and claimed that it was a bargain and a discount.”
“Coles, on the other hand, will effectively be arguing that, well, it's a supermarket, it's entitled to increase prices. In fact, it will say it has held prices on the particular products down for a long period of time to look after consumers, and at some point it had to raise the prices, and it did raise the prices, and subsequently it discounted them, but actually the ticket on those prices was strictly accurate.”
University of Melbourne law professor Jeannie Marie Paterson says this is a test case for how courts will interpret 'misleading' conduct under consumer law.
“So the court will be asked to choose between an approach to the legal prohibition that is based on the expectations created in consumers (that's the ACCC'S argument) and the strict information that was on the price ticket (that's effectively Coles' argument).”
One example raised in court was a 1.2 kilogram can of wet dog food that was priced at $4 for almost ten months.
Coles then raised the price to $6 for a week, before dropping it to $4.50, and marketing that as a 'down down' discount.
It's one of 245 examples raised by the ACCC, and Professor Paterson says the court's decision could impact other retailers too.
“If the ACCC is successful, they'll be able to impose a significant penalty on supermarkets for misleading consumers for conduct that took place a while ago. That will act as a real deterrent.”
But she stresses that the consumer watchdog still has to win.
“I don't think it's in the bag. I think the conduct was bad, but I don't think it's in the bag yet.”
The case is expected to run for 10 days.
