12:07pm 14 May 2026
The strangest thing about the Federal Court’s judgment against Coles is that, on one view, the supermarket was found liable because in the interests of consumers, it did not keep prices higher for longer.
That is the uncomfortable logic sitting beneath the “Down Down” case. Coles raised the prices of various products, a price rise the court found was commercially justified due to supplier cost increases. It later lowered them and promoted the lower prices with “Was/Now” tickets. The ACCC said this was misleading because the “Was” price had only existed for a relatively short time before the product was placed on promotion. Justice O’Bryan agreed, finding that 13 of the 14 sample tickets were misleading because the products had not been sold at the “Was” price for long enough.
At a headline level, the decision looks like a win for grocery shoppers. In a cost-of-living crisis, few people will rush to defend a supermarket giant accused of dressing up higher prices as discounts. However, the judgment deserves closer attention, because the facts found by the Court make the case more complicated than the public narrative suggests.
This was not found to be a simple fake-discount case. O’Bryan J accepted that the price increases resulted from supplier cost price increases. He accepted that Coles increased prices in a commercially justifiable manner. He accepted that Coles did not select artificially high “Was” prices in order to inflate the perceived discount. He accepted that the products were offered at those “Was” prices in the ordinary course of Coles’ business and sold in commercial volumes.
Those findings matter. They mean the “Was” prices were not fantasy prices. They were not numbers plucked from the air to trick shoppers. They were real shelf prices, commercially explained, actually charged, and actually paid by customers.
That is why the case turns on a narrower and more troubling point. Coles’ problem was not that the “Was” price was fake. It was that the “Was” price had not been around for long enough before Coles lowered it.
Most of the sample products had been sold at the higher “Was” price for about four weeks, sometimes less. O’Bryan J concluded that this was not a reasonable period. In the context of manufactured and packaged grocery goods sold in a large supermarket, his Honour held that the tickets would not have been misleading if the products had been sold at the “Was” price for at least 12 weeks immediately before the Down Down promotion.
The practical consequence of the judgment is strange. If a supplier increases its costs, and Coles passes on some of that increase by lifting the shelf price, but then a few weeks later negotiates funding, accepts a lower margin, or otherwise decides to reduce the price, should the law really discourage Coles from telling customers that the price has come down?
Put simply, if a price rise was real, and the later reduction was real, why should Coles be penalised for making that reduction sooner rather than later?
That is the point most ordinary shoppers will understand. Consumers want lower prices now, not after an artificial waiting period of another 8 weeks to reach the 12 week ‘magic’ number. A legal rule that effectively says “hold the higher price for 12 weeks before calling the later price a discount” may protect against some misleading promotions, but it also creates a perverse incentive. It tells supermarkets that, after a genuine cost-driven price increase, they are legally safer if they leave customers paying the higher price for longer. That is hardly an obvious win for consumers.
The Court was plainly conscious of how people actually shop. O’Bryan J accepted that ordinary grocery shoppers are often in a hurry, buying many different products, and not performing an intellectualised analysis of shelf tickets. His Honour also accepted that the vast majority of ordinary consumers would not form any conscious belief about how long the “Was” price had been offered. They would simply have an intuitive sense that the discount was genuine and not artificial.
However, that creates a tension in the reasoning. If consumers do not consciously think about how long the previous price was charged, why does duration become the decisive factor? A shopper seeing “Was $6, now $4.50” is unlikely to assume that the $6 price existed for three months. The ordinary takeaway is simpler, this product was recently offered at $6 and is now being offered for less due to Coles’ efforts.
If the $6 price was fake, the ticket is misleading. If it was briefly contrived to create the illusion of a saving, the ticket is misleading. If almost nobody paid it, the ticket is misleading. However, where the price was commercially justified, as it was here, actually charged and actually paid, the case for legal falsity becomes much less clear.
None of this means supermarkets should be free to play games with reference prices. They should not be allowed to push a price up for a token period, slap a “Was” sticker on it, and pretend customers are getting a bargain. The ACCC was right to scrutinise the practice. In a concentrated grocery market, promotional pricing has to be honest. It may be popular to say Coles misled shoppers. It is more difficult to explain why Coles should have waited longer before lowering prices.
In trying to protect consumers from apparent artificial discounts, the Court may have created an artificial incentive of its own. For supermarkets facing genuine supplier cost increases, the safer course may now be to keep the higher price on the shelf for longer before promoting a reduction. In the middle of a cost-of-living crisis, that is a very strange victory by the ACCC, the regulator designed to protect consumers.
Leave a Reply