ACCC Starts Court Case vs Woolworths on Misleading Discounts

The Australian Competition and Consumer Commission began its federal court case against Woolworths in Sydney on Tuesday, alleging the supermarket chain misled customers through illusory discounts in its Prices Dropped promotion program between September 2021 and May 2023.

The regulator claims Woolworths artificially inflated prices on at least 266 products for short periods before reducing them and advertising the lower prices as genuine savings compared to the temporary highs. In most instances, these so-called discounted prices remained higher than the products' original long-term shelf prices, which had been stable for 180 days or more prior to the spikes. The temporary increases, typically by at least 15 percent and lasting 45 days or less, created a false impression of value, according to the ACCC. Court documents indicate that in 265 of the cases, the promoted Prices Dropped price exceeded the prior long-term price, while in 11 cases it matched it. For 245 products, Woolworths and suppliers had pre-negotiated the final discounted prices and any funding contributions before the spikes occurred, with suppliers often absorbing part of the costs to reduce their profit margins.