Coles Faces Legal Scrutiny Over "Down Down" Discount Claims

Coles Supermarkets Australia Pty Ltd is currently embroiled in a legal battle with the Australian Competition and Consumer Commission (ACCC), which alleges that the supermarket chain misled consumers through its "Down Down" discount promotions. The ACCC claims that Coles artificially inflated prices before offering discounts, leading customers to believe they were receiving genuine savings. The case, which began in February 2026, is expected to last for ten days and focuses on pricing practices from January 2021 to May 2023.

Coles got supplier rebates for discounted promotionsThe Age (Australia)'Not fair dinkum': Accusations that Coles misled customers with Down Down campaign reach courtThe Sydney Morning Herald

The ACCC's case centers on a sample of 245 products, including dog food and popular snacks, which were allegedly sold under a strategy that suggested discounts that were misleading or deceptive. For instance, the ACCC presented evidence showing that certain items were sold at a higher price for a median of 28 days before being discounted, often to prices that were equal to or higher than their original prices. Garry Rich, SC, representing the ACCC, stated, “What’s said on the ticket is a half-truth,” emphasizing that the pricing strategy misled consumers regarding actual savings.

'Not fair dinkum': Accusations that Coles misled customers with Down Down campaign reach court

Coles has defended its pricing strategy, arguing that the "Down Down" promotions were genuine discounts. The supermarket's barrister, John Sheahan, KC, contended that the promotions were a response to rising supplier costs and that consumers understood the context of price fluctuations in a high-inflation environment. Coles acknowledged a mistake in a specific instance where a product was discounted shortly after a price increase, but maintained that this was an outlier rather than a systemic issue.

The Sydney Morning Herald'Not fair dinkum': Accusations that Coles misled customers with Down Down campaign reach courtColes got supplier rebates for discounted promotionsThe Age (Australia)

Internal emails revealed during the trial indicated that some Coles executives were aware that advertising a product as "Down Down" shortly after a price increase was not in line with the campaign's spirit. Despite this, Coles proceeded to implement changes that allowed for shorter periods between price increases and subsequent discounts.

The Age (Australia)Coles got supplier rebates for discounted promotionsThe Sydney Morning Herald'Not fair dinkum': Accusations that Coles misled customers with Down Down campaign reach court

The ACCC argues that the pricing tactics employed by Coles were designed to manipulate consumer perception, suggesting that prices had decreased when they had not. Rich highlighted that the promotional strategy was a deliberate attempt to maintain sales volumes despite rising costs, stating, “Coles disguised those price increases as discounts.” In contrast, Sheahan argued that consumers are capable of understanding price changes in the context of inflation and that the "Down Down" promotions were perceived as legitimate.

The Sydney Morning HeraldColes got supplier rebates for discounted promotions'Not fair dinkum': Accusations that Coles misled customers with Down Down campaign reach courtThe Age (Australia)

The court proceedings will continue to examine the evidence presented by both sides, including the effectiveness of the "Down Down" campaign in driving sales. The outcome of this case could have significant implications for Coles and the broader supermarket industry, particularly regarding how discount promotions are structured and communicated to consumers.

Coles got supplier rebates for discounted promotions

• “What’s said on the ticket is a half-truth.” — Garry Rich, SC, ACCC Counsel

The Age (Australia)

• “In the end, all prices are temporary, nothing lasts forever,” — John Sheahan, KC, Coles Barrister

The Sydney Morning Herald

• “Coles disguised those price increases as discounts” — Garry Rich, SC, ACCC Counsel

The Age (Australia)

The trial is set to resume with further testimonies and evidence, as both parties prepare to solidify their positions in this landmark case.

The Sydney Morning Herald