Coles 'Down Down' Campaign Under Fire as ACCC Takes Supermarket Giant to Court

Australia's supermarket pricing practices are under an intense legal spotlight as the Australian Competition and Consumer Commission (ACCC) takes on retail giant Coles Group in a landmark Federal Court case that could reshape how major retailers promote discounts.

At the heart of the proceedings are allegations that Coles misled shoppers through its long-running "Down Down" promotional campaign by offering what the regulator describes as "illusory" discounts on 245 everyday products between February 2022 and May 2023.

Coles has firmly denied the allegations, arguing its pricing decisions were driven by genuine cost pressures and that customers were offered legitimate value during a period of historically high inflation.

The ACCC, led by Chair Gina Cass-Gottlieb, alleges that Coles temporarily increased prices on hundreds of popular household items before reducing them under the "Down Down" banner - creating the appearance of a discount that was, in many cases, higher than the original long-term price.

According to court documents, the watchdog claims Coles:

• Raised the price of products for a short period;
• Then reduced the price from the inflated level;
• Marketed the new price as a significant discount;
• Sold tens of millions of these items, generating "significant revenue".

Among the 245 products cited in the case are everyday staples including Arnott's Shapes, Cadbury chocolates, Colgate toothpaste, Kellogg's snack bars, Palmolive shampoo, Weet-Bix cereal, Maggi noodles and Whiskas cat food.

When announcing the legal action in September 2024, Cass-Gottlieb alleged the conduct was not merely incidental but deliberate.

"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," she said at the time.

A parallel case has also been launched against Woolworths Group over similar "Prices Dropped" campaigns.

On the opening day of the 10-day Federal Court hearing, the ACCC's legal counsel, Garry Rich, labelled the pricing conduct "utterly misleading" and accused Coles of disguising price increases as discounts.

One of the key examples raised in court involved a 1.2kg pack of Nature's Gift Wet Dog Food.

According to the ACCC:

• The product was priced at $4 for roughly 300 days;
• It was increased to $6 for just seven days;
• It was then reduced to $4.50 and labelled "Down Down".

Rich told the court that although the claim that the price had "gone down" was technically true, it failed to disclose that the prior $6 price existed only briefly - and that customers had paid $4 for almost the entire previous year.

"Why on earth are you telling your customers the price is going down? They're not," Rich argued.

However, presiding judge Michael O'Bryan challenged elements of the ACCC's reasoning, suggesting that cost increases may have rendered earlier pricing comparisons irrelevant.

The debate underscores the central legal question: what would a reasonable consumer understand when they see a "Down Down" label?

Coles has rejected the allegations and maintains that any price increases were driven by legitimate cost pressures.

In a prior statement, company secretary Daniella Pereira said the supermarket had been receiving a "large number of cost price increases" from suppliers during the period in question.

Australia was experiencing inflation at a 30-year high in 2022 and 2023, and supermarkets faced mounting supply chain disruptions, freight costs and labour expenses.

Coles argues it sought to balance rising supplier costs with offering value to customers, restarting promotional activity once new baseline prices had been established.

The company will present its full defence during the hearing, contending that the discounts were genuine and not misleading.

The ACCC is seeking:

• A declaration that Coles breached Australian Consumer Law;
• Significant financial penalties;
• Court orders and costs.

While the potential fine has not been specified, recent penalties imposed by the Federal Court provide context. In 2025, telecommunications giant Optus was fined $100 million following an ACCC case over unfair sales practices. Qantas was similarly ordered to pay $100 million in 2024 over cancelled flight ticket sales.

Coles reported net profits exceeding $1 billion for the 2024-25 financial year, meaning a comparable penalty could represent a material impact on annual earnings.