{"id":11201,"date":"2026-05-14T08:25:27","date_gmt":"2026-05-14T08:25:27","guid":{"rendered":"https:\/\/www.europesays.com\/australia\/11201\/"},"modified":"2026-05-14T08:25:27","modified_gmt":"2026-05-14T08:25:27","slug":"coles-down-down-pricing-supermarket-giant-faces-massive-fines-after-federal-court-rules-fake-discount-claims-misled-shoppers","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/australia\/11201\/","title":{"rendered":"Coles Down Down pricing: Supermarket giant faces massive fines after Federal Court rules fake discount claims misled shoppers"},"content":{"rendered":"

Updated May 14, 2026 \u2014 6:04pm,first published May 14, 2026 \u2014 9:17am<\/p>\n

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Coles will face fines and demands for compensation that could reach hundreds of millions of dollars for spruiking fake discounts to more than 10 million shoppers, after the Federal Court ruled the supermarket giant misled Australians for years through its \u201cDown Down\u201d program.<\/p>\n

Justice Michael O\u2019Bryan upheld allegations from the Australian Competition and Consumer Commission (ACCC) that Coles\u2019 so-called discounts were based on increased prices that were available for less than a month, rendering them a sham.<\/p>\n

Commission chair Gina Cass-Gottlieb declared the regulator would be pursuing a penalty against Coles, which made $1.1 billion in profit last financial year, large enough that the chain would not just see it as a \u201ccost of doing business\u201d while a class action firm flagged it had 10 million victims to compensate.<\/p>\n

The decision, which shocked many in the sector, could have major implications for Woolworths,<\/a> too, because that chain is also facing allegations it misled customers using similar tactics to Coles in a case that was heard by the same judge.<\/p>\n

But O\u2019Bryan delivered a major silver lining for Coles, setting out clear rules for discounting in the supermarket sector and questioning whether customers were even harmed by the chain\u2019s practices.<\/p>\n

\u201cIf Coles had offered the products for sale at the \u2018Was\u2019 price for twelve weeks, the Down Down tickets would not have been misleading,\u201d O\u2019Bryan wrote in his judgment. \u201cThat observation raises the question whether consumers were harmed by the conduct.\u201d<\/p>\n

However, shoppers at Coles on Thursday said the finding that Coles had deceived customers vindicated their suspicions. \u201cThey just seem to have gotten away with ripping people off,\u201d said Deb Barnes, who was shopping at Coles in Melbourne\u2019s Yarraville with her son Charlie on Thursday afternoon.<\/p>\n

\"CharlieCharlie and Deb Barnes at Coles YarravilleRuby Alexander<\/p>\n

Others were resigned to the supermarket sector\u2019s behaviour<\/a>. \u201cIf you\u2019re going to get ripped off here, you\u2019re going to get ripped off everywhere you go,\u201d said Sally Walker outside the same Yarraville location.<\/p>\n

Related Article\"Coles<\/a><\/p>\n

At a Coles in North Sydney, shopper Guy Hannan said the supermarkets needed to be reined in, adding, \u201cThey need to be more heavily regulated. They\u2019ve got a lot of power.\u201d<\/p>\n

Yve Stewart, another Coles shopper, said the Coles case had eroded her trust in the major supermarket and its rival Woolworths. \u201cThey\u2019re cheating, it\u2019s simple. We all know,\u201d Stewart said.<\/p>\n

Four week prices weren\u2019t \u2018genuine\u2019<\/p>\n

The ACCC had argued that Coles artificially jacked up prices<\/a> for hundreds of products for a brief period so it could claim the new prices were a reduction on its previous ones, when in fact the \u201cDown Down\u201d price was higher than just a few weeks before.<\/p>\n

Coles defended the claims, arguing its discounts were genuine specials to help customers and sales after prices rose because of inflation.<\/p>\n

O\u2019Bryan found that Coles increased prices because suppliers wanted that to happen \u201cin a commercially justifiable manner\u201d.<\/p>\n

But he said that the goods needed to be sold for 12 weeks at the higher price before customers would consider the discounts genuine. Most of Coles\u2019 products were at the higher price for just four weeks. As a result, O\u2019Bryan found Coles had misled customers.<\/p>\n

\u201cThe relevant products were not sold at the \u2018was\u2019 price stated on the ticket for a reasonable period, and, as a consequence, the discount represented on the tickets was not genuine,\u201d O\u2019Bryan said. That misled customers, he found.<\/p>\n

Highest penalties for breaches of the Australian Consumer LawPhoenix Institute of Australia: $438 million. For unconscionable conduct, after students were misled into thinking the vocational courses they were enrolling in were free.Australian Institute of Professional Education: $153 million. For unconscionable conduct, as well misleading or deceptive conduct, when enrolling consumers into online diploma courses that were promoted as \u201cfree\u201d but incurred VET FEE\u2011HELP debts.Volkswagen: $125 million. For making false representations about compliance with Australia\u2019s diesel emissions standards.<\/p>\n

O\u2019Bryan\u2019s judgment comes ahead of his ruling in separate, but very similar proceedings against Woolworths by the ACCC, which he is also overseeing.<\/p>\n

Coles said it was reviewing the judgment, which it could appeal, and emphasised that its prices had risen for genuine commercial reasons. \u201cOur priority has always been \u2013 and will continue to be \u2013 delivering value to our customers,\u201d a company spokesman said.<\/p>\n

\"Coles\u2019Coles\u2019 \u201cDown Down\u201d program misled millions of customers into thinking discounts were genuine.Eamon Gallagher<\/p>\n

\u201cThis case highlights the importance of clarity for both retailers and customers alike. And the need for clear, practical guidance on minimum price establishment periods to ensure the retail industry can avoid unnecessary litigation in future,\u201d he said. Woolworths declined to comment, citing the ongoing litigation.<\/p>\n

Assistant Minister for Competition Andrew Leigh said the decision was \u201can important win for shoppers, and a tribute to the ACCC\u2019s patient, rigorous enforcement of consumer law\u201d.<\/p>\n

Related Article\"The<\/a>Hefty penalty expected<\/p>\n

Cass-Gottlieb said she was happy with the outcome of the case, which the commission brought because Coles\u2019 pricing was making it hard for customers to find genuine value at the supermarket.<\/p>\n

\u201cThe ACCC will seek a substantial penalty, reflecting the importance of accurate pricing for consumers and also because it is very important that a penalty is not just able to be dismissed as a cost of doing business, and that it becomes at a level that is a significant deterrent for such conduct,\u201d she said.<\/p>\n

While Cass-Gottlieb would not speculate on the size of a fine, given the ongoing parallel case against Woolworths, others said Coles would most likely receive a severe financial penalty.<\/p>\n

In addition to penalties for breaking consumer law, which have run into the hundreds of millions of dollars in other cases, Coles could have to pay damages, including from a class action case linked to the ACCC\u2019s proceedings.<\/p>\n

Former ACCC chair Allan Fels said Coles\u2019 penalties could easily exceed $100 million, and the financial penalties needed to be in the hundreds of millions to act as a deterrent.<\/p>\n

\u201cThe repercussions for Coles now will be very big. I\u2019d expect the fines to be very high, in the hundreds of millions of dollars in penalties,\u201d he said.<\/p>\n

Rod Sims, who preceded Cass-Gottlieb at the ACCC, said the decision set a precedent well beyond supermarkets.<\/p>\n

\u201cThis is a big win for consumers because \u2026 it raises the bar for calling something a discount. You can\u2019t just be flippant about it,\u201d Sims said.<\/p>\n

Gregory Mackey, special counsel at Gerard Malouf & Partners, which brought the related class action against Coles, said that, pending any appeals, the next step would be calculating damages and compensation.<\/p>\n

Mackey said the class action represented an estimated 10 million customers, given an \u201copt-out\u201d system with a deadline that passed last year. The lawyers plan to call experts before hearings to determine payout request, but Mackey expects it will be at least another year before that process proceeds.<\/p>\n

\u201cBecause of its loyalty program, Coles has a very good record of who bought these items and for how much. Normally, we\u2019d have no idea how to calculate this, but for a portion of these sales they have records which they can show the courts,\u201d he said. Non-members could produce receipts or credit card statements as proof of purchase and a right to damages.<\/p>\n

\u201cWe\u2019ve done surveys which found people wait until a product is on special, because they trusted Coles, and then they bought in bulk. They may not have bought it at all,\u201d he said.<\/p>\n

The ACCC alleged Coles misled shoppers in relation to \u201cDown Down\u201d pricing across 245 products when filing the initial legal action.<\/p>\n

But for the two-week hearing, the parties agreed to focus on a small number of products sold between January 2021 and May 2023, including two-litre bottles of Coca-Cola, Colgate toothpaste, 900-gram tins of Karicare baby formula, Rexona deodorant, Lurpak butter and a box of Arnott\u2019s Shapes.<\/p>\n

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning<\/a>.<\/p>\n

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\"EliasElias Visontay<\/a> is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email<\/a>.\"JackJack Gramenz<\/a> is a breaking news reporter at The Sydney Morning Herald.Connect via email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Updated May 14, 2026 \u2014 6:04pm,first published May 14, 2026 \u2014 9:17am Save You have reached your maximum…\n","protected":false},"author":2,"featured_media":11202,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[99],"class_list":{"0":"post-11201","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-brisbane","8":"tag-brisbane"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/11201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/comments?post=11201"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/11201\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media\/11202"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media?parent=11201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/categories?post=11201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/tags?post=11201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}