Australia’s major supermarkets have defended their price promotions for Strepsil lozenges and Oreos as part of their broader legal rebuttal against accusations they misled shoppers by offering “illusory” discounts on hundreds of common groceries.
The new legal documents, lodged by Coles and Woolworths in the federal court, come just over two months after the ACCC started legal proceedings, alleging the big supermarkets briefly increased prices on hundreds of products before placing them in promotions.
The consumer regulator singled out Strepsils and Oreos price promotions as examples of what it described as misleading promotions, with the strategy allegedly used to price everything from marinades to instant noodles well above their regular price.
The allegations refer to practices commonly known as “was/is” comparative pricing, adopted between 2021 and 2023 in Coles’ “down down” promotion and Woolworths’ equivalent category, “prices dropped”.
Coles said in its new court submission that prices were increased during a period of “significant cost increases” and in response to price alteration requests from suppliers.
“The non-promotional price was a genuine, undiscounted shelf price,” Coles said.
“The subsequent down down program price was therefore a genuine discount from that shelf price. The discount was not illusory.”
The ACCC’s allegations included a breakdown of a promotion for a six-pack of Strepsils honey and lemon throat lozenges, which it said Coles displayed at a regular price of $5.50, was bumped up to $7 for 28 days, and was then promoted as a discount at $6.
In its documentation, Coles said prices were increased in response to requests by suppliers.
This increased price “superseded” the old price, according to the Coles document, which it says makes the subsequent reduction a genuine discount.
Woolworths made a similar argument in its court documents, addressing the pricing of a 370g family pack of Oreos that the ACCC had cited.
Woolworths said while it had previously sold the pack on promotion at $3.50, it was taken off promotion and, after a price request from the supplier, retailed for $5. It was subsequently sold for $4.50 on promotion “as a result of negotiations between Woolworths supermarkets and the supplier”.
The ACCC has previously indicated to the court that the reasons the supermarkets gave for their promotional pricing didn’t change its view that the conduct was misleading.
It is seeking “a significant penalty” after the major retailers allegedly profited from the sale of tens of millions of products sold through promotions the ACCC claimed breached consumer law.
The court action comes during a period of intense scrutiny on the major grocery retailers, which have been subject to scrutiny at several parliamentary inquiries, as well as a year-long regulator probe over pricing practices.
Rising food prices have been a standout contributor to inflation over an extended period, along with other important household costs such as insurance, fuelling public scrutiny of supermarkets ahead of an election expected to be fought on cost-of-living issues.
