SYDNEY, May 14 (Reuters) - Australia's No. 2 grocery chain Coles engaged in misleading conduct by increasing the price of hundreds of household items and then advertising discounts that were higher than the original price, a court ruled on Thursday.
The Australian Competition and Consumer Commission (ACCC) brought the case in 2024 - and a similar case against larger rival Woolworths - at the height of public pressure on supermarket chains over shelf prices amid an inflation spike.
The Coles lawsuit
focused on some 245 products advertised as being on discount between February 2022 and May 2023, and a trial earlier this year scrutinised 14 items included in a regular promotion called "down down".
Coles raised its prices in a "commercially justifiable" way given rising supplier costs, but applied the promotional discounts too soon for them to appear as genuine discounts, said Federal Court Justice Michael O'Bryan.
"The 'down down' ticket would not have been misleading if the products had been sold at the 'was' price for a minimum of 12 weeks," O'Bryan said in a livestreamed hearing.
The ACCC and Coles were not immediately available for comment.
On 13 of the 14 products scrutinised, the promotions "were misleading because the relevant products were not sold at the 'was' price stated on the ticket for a reasonable period", judge O'Bryan added.
"As a consequence, the discount on the 'down down' ticket was not genuine."
The ACCC lawsuit was heard at the same time as a class-action lawsuit along similar lines, the judge said.
A case management hearing to discuss next steps was scheduled for June 10.
(Reporting by Byron Kaye; Editing by Christian Schmollinger and Muralikumar Anantharaman)
