Sydney (TDI): The consumer watchdog in Australia is suing the two largest grocery chains in the country, claiming they made up a bogus claim to have permanently lowered the prices or discount offers of hundreds of products.
Coles and Woolworths are accused of violating consumer law by temporarily boosting prices and then decreasing them to a price that was either greater than or equal to the initial cost by the Australian Competition and Consumer Commission (ACCC).
Although Woolworths stated it would examine the charges, Coles declared it would defend itself against discount offers.
Because of accusations of price gouging and anti-competitive behavior, the grocery giants—which control two thirds of the Australian market—have come under increased scrutiny in the last year.
If the allegations of behavior are confirmed, Prime Minister Anthony Albanese declared them to be “completely unacceptable.”
At a news conference, he disclosed draft legislation for a previously promised “code of conduct” for supermarkets. “This isn’t characteristically Australian. Customers don’t deserve to be treated like fools.”
Australia’s consumers now see Coles and Woolworths’ “Prices Dropped” and “Down Down” promotions, which they have been exposed to for years, as a consistent drop in the regular cost of their items, according to ACCC chair Gina Cass-Gottlieb.
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However, “the discounts were, in fact, illusory” in many instances, she continued.
After receiving complaints and conducting its own monitoring, the watchdog discovered that Woolworths had deceived customers about 266 products over a period of 20 months and Coles about 245 products over a period of 15 months.
From mouthwash, Band-Aid plasters, and pet food to well-known Australian brands like Kellogg’s cereal, Bega Cheese, and Arnott’s Tim Tam biscuits, the products had it all.
According to ACCC estimates, the two corporations generated substantial revenue from the sale of “tens of millions” of the impacted products.
The Australian Corporate Citizenship Commission (ACCC) is requesting that the Federal Court of Australia impose “significant” fines and an injunction compelling the two companies to expand their programs for delivering charity meals.
Coles stated in a statement that increased corporate expenses were driving up product prices.
Restarting promotions “as soon as possible” after new prices were set was part of its “strike an appropriate balance” strategy between managing that and “offering value to customers.”
According to a statement, Woolworths would discuss the allegations with the ACCC.
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“It’s critical that consumers can trust the value they perceive when they purchase at our locations, as they have told us they want us to work even more to give genuine value to them.”
A study of the country’s Food and Grocery Code of Conduct was commissioned by the government in response to the supermarkets’ increasing scrutiny.
In order to protect both suppliers and customers, the assessment suggested that a more stringent code of conduct be implemented and enforced by the ACCC.
According to the providers, who feel they are being unfairly squeezed, the new code will establish severe fines for violations and set forth requirements for the companies’ interactions with them.
