Like all the best frauds, it is stunning in its simplicity. This example from the ACCC tells the story: the shelf price of a family pack of Oreo cookies at Woolies was $3.50 for two years, from January 1, 2021 to November 27, 2022. Then the price skyrocketed to $5.00.
Twenty-two days later, the Oreos price fell to $4.50. Woolies promoted it as a “Prices Dropped” special, showing the “was” price as $5.00.
This is the essence of the prosecution the ACCC has launched against Woolies and Coles: it says it has identified 511 instances between the two supermarket giants where they temporarily raised a product’s price, then reduced it to a level higher than the “real” underlying price, claiming to deliver customers a discount.
In consumer law terms, this is a classic species of misleading or deceptive conduct. It induces customers to buy, thinking they are getting a bargain when in fact they’re being ripped off. The case law is clear — if the facts are as the ACCC alleges, both grocery giants are going down, down.
But I said “fraud”. That’s beyond the ACCC’s remit, although it can prosecute cases like these as criminal offences if they’re serious enough. Fraud is a different beast: it requires knowing dishonesty, designed to obtain a financial advantage from someone else by deceiving them.
I mention it not because there’s any prospect Woolies and Coles will be prosecuted for criminal fraud, but because it underlines a remarkable feature of their corporate behaviour: sheer flagrancy.
Consider just how brutally cynical the Oreos pricing exercise was. It cannot have happened by accident or inadvertence; inside Woolworths, somebody, or rather some number of people, thought it up and decided it was a great idea. It then passed who knows how many other pairs of corporate eyes before and during its execution. And nobody said, “Wait, that’s wrong.”
It’s difficult to see how the companies could have imagined an internal justification for this practice other than “this will make us more money, by tricking our customers”. Sure, it’s the exact opposite of the values they so constantly advertise, but the hypocrisy isn’t the most stunning aspect. It’s the sheer amorality — wrongdoing by design, not ethically distinguishable from theft.
A close analogy to this scenario can be found at Qantas and the practice it developed — also exposed by the ACCC — of selling tickets for flights it knew had already been cancelled. If the company operated out of a car boot instead of shiny buildings, its key executives would have been in handcuffs for perpetrating an unsophisticated but effective fraud.
Bewailing people in expensive suits routinely getting away with things ordinary joes can’t is not worth losing sleep over. It is what it is. What’s interesting is how easily this sort of corporate amorality emerges and is translated into deeply harmful action, inside companies that commit so much of their time and advertising budgets on convincing us they would not — could not — ever do such a thing.
The modern-day, ESG-intent, corporate-social-responsibility-loving company operates on an ostensible moral plane about a billion light years higher than that of the robber barons of a century ago, or of the Enrons and James Hardies of accessible memory. Their boards surely shudder to think they could ever even contemplate actively harming their key stakeholders, the most key of whom are their cherished customers.
Woolworths’ mission is to “create better experiences together for a better tomorrow”, to which end it strives to have “a positive impact on our team, our planet, our customers and the communities we serve”. By no contrast, Coles is “dedicated to delivering quality, value service to Aussie families and communities”; it is “proud to help Aussies live happier, healthier lives”.
Again, though, the hypocrisy isn’t the point. The question we should be asking is why. Is this disjuncture between good intentions and bad actions inevitably inherent in the nature of the corporate beast?
The good news is that the answer is no. Amorality is a choice. It is true that the less competition a company faces, the more likely it is that it will engage in monopolistic behaviour to the detriment of its competitors, customers and community. That doesn’t mean its guiding minds have no agency in doing so.
Investing corporations with their own legal identity was a mistake, because it implies they have a soul (they don’t). This provides a too-ready excuse for the humans who populate them to evade personal responsibility for their choices.
Which points to a solution. Coles and Woolies will cop a plea deal, no doubt, and pay penalties in the millions. That will not change their behaviour, because they can’t behave (or misbehave).
If we want the people who run corporations to make better choices, they need to face personal consequences when they choose to make their employer do harm. Otherwise, prepare to rinse and repeat.
