The consumer watchdog’s lawsuits against Coles and Woolworths are just part of its plans to clamp down on misleading pricing, its chair has signalled, stressing that shoppers under pressure from the cost of living relied on discounts being genuine.
Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottlieb said misleading pricing and product claims in supermarkets and retailers were major issues because spending at supermarkets and other retailers was such a big part of the household budget.
“We continue to find, and this is of more intense impact in times of rising cost-of-living pressures, that there are pretty blatant misleading pricing claims,” Cass-Gottlieb said ahead of a speech outlining the commission’s priorities for this year.
“When families are seeking to save money, they really look for a discount … They are significantly short-changed and harmed when they (discounts) are not truthful, as are businesses that are complying with the law.”
Cass-Gottlieb also signalled a renewed focus on digital markets as another significant priority in terms of manipulative practices and unsafe goods.
“This priority recognises the emergence of practices including subscription traps and other dark patterns that manipulate consumer behaviour and unfairly impact consumer choice,” Cass-Gottlieb said.
“It also recognises the rise in unsafe consumer goods available right across our economy facilitated by the increasing scale and reach of digital markets.”
The ACCC has warned of the need to plug “a very significant” regulatory gap in this area as digital platforms take over even more crucial parts of the economy.
“We think there is not the sufficient regulatory strength to achieve the protections that we need to have,” Cass-Gottlieb said.
The ACCC also flagged consumer guarantees on cars and essential services like energy and telecommunications as priority areas where complex pricing structures make it difficult for consumers to select the most competitive service plan.
“Because these services are so essential, the consequences of poor market outcomes can be felt more acutely,” she says in a copy of her speech she is due to present to CEDA on Thursday.
Cass-Gottlieb declined to comment on the ACCC’s case against Coles, which is continuing before the Federal Court this week.
The ACCC lobbed bombshell allegations against Coles and rival Woolworths in late 2024, alleging the two retailers misled consumers through pricing promotions that were actually higher, or the same as, the previous regular price.
Coles is defending the case, and has said many of its suppliers who were facing cost pressures asked it to push up prices during the period in question.
This week in court, Coles has conceded it made a mistake when it “discounted” tins of dog food to $4.50 that had been selling for $4 just eight days earlier, declaring it usually had guardrails requiring items to be at a base price for a month before putting them on special.
The hearing will continue for the rest of this week and the next.
Woolworths, which is facing similar allegations from the ACCC, is expected to face court in coming months.
Last month Cass-Gottlieb warned that it could take further action against Coles and Woolworths using new price-gouging laws that come into effect this July. When Treasurer Jim Chalmers announced the government had made the regulations in December, he said they would fix a key gap in the competition framework.
“The ban will prohibit very large retailers from charging prices that are excessive when compared to the cost of the supply plus a reasonable margin,” Chalmers said.
The maximum penalty per contravention is the greater of: $10 million; three times the value of the benefit derived, or, if that value cannot be determined; 10 per cent of the company’s turnover during the preceding 12 months.
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.
