Supermarket giants Woolworths and Coles are under scrutiny for allegedly misleading consumers with "fake" discounts across various grocery categories, according to new court documents.
The Australian Competition and Consumer Commission (ACCC) alleges the retailers inflated prices of everyday items such as pet food, infant formula and Coca-Cola (NYSE:KO), before offering minimal discounts, falsely advertised as significant savings.
The ACCC claims products, including Raid mozzie spray and Lucky Dog pet food, were sold at inflated prices — up to 39% higher than regular rates — before being discounted.
This practice allegedly covered more than 250 grocery items across personal care, household cleaning and food categories.
“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,” ACCC chair Gina Cass-Gottlieb said.
The watchdog’s investigation, launched in late September, highlights the impact on consumer trust and follows a broader inquiry into supermarket practices.
Woolworths and Coles have both issued statements promising to review the claims and defend their positions in court.
If found guilty, they could face fines of up to $50 million or 30% of their adjusted turnover during the alleged violation period.