Federal Court rules Coles misled customers with 'Down Down' discount promotions

Supermarket giant Coles Group (ASX: COL) has been found to have made false or misleading representations through its "Down Down" discount promotions, with the Federal Court ruling against the retailer on 13 of 14 sample pricing tickets examined in proceedings brought by the Australian Competition and Consumer Commission (ACCC).

The case centred on 245 common products - including everyday items such as pet food, coffee and personal care products - where Coles allegedly raised prices by at least 15 per cent for short periods before placing them on Down Down promotions at prices equal to or higher than what customers had previously been paying.

The conduct occurred between February 2022 and May 2023 across more than 840 Coles stores nationally.

The ACCC alleged that Coles' Down Down tickets, which featured a prominent red downward-pointing arrow, represented to consumers that the products were being offered at a discount or reduced price.

The court agreed in all but one instance, finding that a single ticket which did not display a "was" price alongside the Down Down price was not misleading.

Penalties and other orders will be determined at a later hearing.

ACCC chair Gina Cass-Gottlieb has welcomed the court's finding that Coles breached the Australian Consumer Law.

“The ACCC brought this case in the public interest because we considered that Coles’ pricing practices within its ‘Down Down’ program made it harder for customers to identify genuine value for money while shopping for household essentials,” says Cass-Gottlieb.

“We had received complaints by consumers about the ‘Down Down’ discounting claims made by Coles.

"We understand how important it is for consumers to get value for their supermarket purchases, and decided to take action to test the discounting practices in court.

“This case has increased transparency and accountability in relation to Coles’ Down Down program.”

In a statement to the ASX today, Coles acknowledged the decision of the Federal Court and offered an explanation of its actions.

"The court found that all price increases resulted from supplier cost price increases and were, therefore, commercially justifiable," says the company.

"However, the court found that, after a cost price increase, a minimum price establishment period of 12 weeks was required before promoting products on its Down Down program.

"As a result, the court found the Down Down tickets were misleading."

Coles says it is is reviewing the judgement.

The ruling comes after the ACCC first took Coles and Woolworths Group (ASX: WOW) to court in September 2024 over their respective discount programs.

A parallel case against Woolworths involving 266 products under its "Prices Dropped" program has had judgment reserved.

The ACCC's original filing noted that "tens of millions" of the affected products were sold, generating "significant revenue" for Coles during the period of the alleged conduct.

Andy Kelly, director of campaigns at consumer advocacy group CHOICE, says the judgment sends a strong message but warns the single non-misleading finding exposes a gap in current protections.

“While the judgement is good news to hold supermarkets accountable for clear, transparent pricing, it reinforces the need for stronger pricing reforms," says Kelly.

"At a time when many households are facing cost of living pressures, it’s more important than ever for consumers to be able to trust that promotions reflect genuine discounts.

"Hiking prices whilst telling consumers that prices are down has allowed Coles to have its cake and eat it too.”

Kelly notes that the Nature’s Gift dog food Down Down promotion was found not to be misleading as the tag did not include a "was" price, despite having only been sold at a higher price for one week.

"Without requiring supermarkets to publish the previous price of the product, supermarkets could potentially remove the ‘was’ price and continue to engage in similar conduct,” says Kelly.

“We continue to call on the federal government to implement the ACCC supermarkets inquiry recommendations in full, by introducing minimum information requirements for price displays and discount promotions, including the previous price of the product, the date range over which that previous price applied, and the percentage of the discount.”

The ACCC's supermarkets inquiry, completed in March 2025, delivered 20 reform recommendations aimed at improving pricing transparency and competition in the sector.

The Federal Court ruling has also given fresh impetus to two class actions filed on behalf of consumers.

Carter Capner Law director Peter Carter, whose firm has attracted more than 30,000 consumer registrations, estimates potential compensation of $2,000 to $5,000 per household.

GMP Law chairman Gerard Malouf has provided a more conservative estimate of $200 to $1,300 per household in potential refunds, describing the class action as "essential for upholding consumer rights".