Woolworths, one of Australia’s leading supermarket chains, is set to defend its discount pricing practices in the Federal Court against allegations from the Australian Competition and Consumer Commission (ACCC). The consumer watchdog claims that Woolworths used misleading discounts that resulted in customers paying the same or even higher prices than originally listed on shelves.
This legal battle follows a similar case involving Coles, with the court awaiting both parties’ arguments before making a decision. According to the ACCC, the misleading discount claims, which affected 266 products over a span of 20 months from late 2021 to mid-2023, potentially misled millions of consumers regarding their purchasing choices.
The ACCC chair, Gina Cass-Gottlieb, expressed concern that these deceptive practices impaired consumers’ ability to make informed decisions. The legal case will primarily focus on a narrowed list of 12 products, including well-known items like Tim Tams and Carman’s muesli bars.
Despite the accusations, Woolworths maintains its stance, asserting that it never engaged in deceptive behaviour. The supermarket giant acknowledged the impact of post-COVID inflation on pricing and emphasised its efforts to provide value through initiatives like their Prices Dropped program, which aimed to mitigate increased supplier costs passed on to customers.
Woolworths respects the ACCC’s role in regulating the industry and takes these allegations seriously. The supermarket chain’s rebuttal comes at a time when a new wave of inflation, largely triggered by escalating oil prices due to geopolitical tensions, is anticipated to hit Australian consumers.
The scrutiny on Australia’s supermarket industry has intensified recently due to the cost pressures resulting from the pandemic, leading to multiple investigations. One inquiry concluded that Australian supermarkets are among the most profitable globally, with profit margins widening post-pandemic. Although no evidence of price gouging was found, the ACCC has indicated potential legal actions linked to new excessive pricing laws set to take effect in 2026.
Coles and Woolworths dominate the Australian supermarket sector, collectively accounting for approximately two-thirds of the market share. As this case unfolds, it underscores the ongoing tension between large retailers and regulatory bodies regarding consumer rights and fair pricing practices.