Coles Defends ‘Down Down’ Discounts as ACCC Slams ‘Illusory’ Pricing in Federal Court
News aggregator/Tuesday 17 February,2026/GeminiAI
MELBOURNE – The Federal Court has become the latest battleground for Australia’s cost-of-living crisis as the Australian Competition and Consumer Commission (ACCC) officially kicked off its high-stakes legal action against Coles.
At the heart of the case is the supermarket giant’s iconic “Down Down” campaign, which the regulator alleges was used to mask price hikes on hundreds of everyday items, ranging from pet food to baby formula.
The Allegations: “Illusory” Savings
The ACCC’s opening submissions, led by Garry Rich SC, painted a picture of a calculated pricing strategy designed to deceive. The watchdog alleges that between February 2022 and May 2023, Coles temporarily spiked the prices of at least 245 products for a brief period—often as little as four weeks—before dropping them to a “discounted” price.
The catch? The new “discounted” price was frequently higher than or equal to the original long-term price before the spike.
“A consumer who knew the real facts would not think the price had gone down,” Mr. Rich told the court. “The savings were literally true but utterly misleading.”
Key Examples Cited in Court
The court heard specific data regarding popular household items where the “was/is” pricing was called into question:
The ACCC alleges that in many instances, Coles had already planned to move the products to a “Down Down” promotion before the price spike even occurred, using the temporary hike solely to establish a higher “was” price.
The Defence: “Fair Dinkum” Discounts
Coles has signaled a robust defense, with barrister John Sheahan KC arguing that the price movements were a legitimate response to inflationary pressures and rising wholesale costs from suppliers.
Coles maintains that its customers are savvy and understand that “Down Down” represents a long-term price drop from a genuine, albeit recently increased, retail price.
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Wholesale Costs: Coles argues the price spikes were necessary to cover higher costs charged by suppliers.
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Consumer Perception: The defense claims the “Down Down” promotion is a “fair dinkum” representation of a price being lower than it otherwise would have been without the intervention.
What’s at Stake?
This case is being watched closely by the Australian public and the retail industry alike. If found guilty of breaching Australian Consumer Law, Coles faces massive financial penalties. Under current laws, the maximum fine for a single contravention can be the greater of:
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$50 million;
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Three times the benefit obtained from the conduct;
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30% of the company’s turnover during the period of the breach.
The ACCC is also seeking community service orders, potentially requiring Coles to fund meal delivery charities—a symbolic penalty given the cost-of-living context of the allegations.
The hearing is expected to continue for several weeks, with a similar case against Woolworths also looming on the legal horizon.
