October 22nd 2024.
Coles and Woolworths, two of the biggest supermarket chains in Australia, are facing accusations of fake discounts that may be even more widespread than initially believed. According to documents filed with the Federal Court, the alleged scam has been laid out in great detail, shedding light on the full extent of the situation.
Nine's finance editor, Chris Kohler, explains that the documents reveal a system allegedly used by the two supermarkets to deceive customers. This system apparently covered every aisle and involved raising prices before offering a small discount and labeling it as a sale. This practice, if proven to be true, would go against consumer protection laws and is being investigated by the Australian Competition and Consumer Commission (ACCC).
The court documents filed by the regulator today claim that this system was used for 600 products across Coles and Woolworths. For instance, insect repellent was allegedly priced at $9, then marked up to $13.50, and finally "discounted" by $1. This means that the discount was actually 39% higher than the original price. The ACCC argues that this is misleading for customers and is a violation of the law. Other products like lemonade, dog food, noodles, and biscuits are also being highlighted as examples of Woolworths' inflated discounts, with prices ranging from 29-34% above the original.
Similarly, the ACCC is accusing Coles of similar practices with products such as hand soap, coffee, soft drinks, and pet food. These products allegedly had discounts ranging from 33-36% above their original prices. Despite Coles and Woolworths being fierce competitors, the regulator claims that the system used by both supermarkets was nearly identical.
In addition to the court case, the ACCC is also conducting a report on supermarket behavior, which is set to be released in February. This report will likely shed further light on the alleged fake discounts and provide more information on the practices of Coles and Woolworths.
Overall, the documents filed with the Federal Court have revealed new details about the alleged scam, painting a clearer picture of the situation. The ACCC's investigation and upcoming report will likely provide more insight into the practices of these two supermarket giants.
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