The discount is real in the math, but fake in the context.
In a ruling that touches something older than consumer law — the question of whether a bargain is real — Australia's Federal Court found that supermarket giant Coles had been staging discounts rather than offering them, raising prices before lowering them and calling the return to normal a saving. Justice Michael O'Bryan's decision, covering 245 products across fifteen months, establishes a new legal threshold for honesty in retail pricing and arrives at a moment when the country's two dominant grocers face growing scrutiny over their hold on the market. The judgment does not merely penalise a company; it names a practice that many shoppers sensed but could not prove, and asks what trust between seller and buyer is actually worth.
- Coles quietly inflated prices on 245 everyday products before launching 'Down Down' promotions, making manufactured discounts look like genuine savings to ordinary shoppers.
- Australia's consumer watchdog pursued the case as a systemic deception, not an isolated error, arguing the tactic undermined the basic trust consumers place in advertised prices.
- The court drew a clear line: a discount is only honest if the higher price was held for at least twelve weeks — a threshold thirteen of fourteen sample products failed to meet.
- Coles is contesting the ruling's framing, positioning the problem as regulatory ambiguity rather than deliberate misleading, even as it faces the prospect of significant fines and corrective orders.
- With a parallel case against Woolworths — covering 266 products over twenty months — still pending, the two chains that together control two-thirds of Australia's grocery market are both now in the regulator's sights.
Australia's Federal Court has ruled that Coles, one of the country's two supermarket giants, misled shoppers through a discount campaign that was more theatre than saving. The judgment, delivered by Justice Michael O'Bryan, found that Coles' 'Down Down' promotions were built on a simple illusion: raise a product's price, then lower it back down and advertise the return as a bargain. The Australian Competition and Consumer Commission identified 245 products — toothpaste, biscuits, and other everyday items — caught in this pattern between February 2022 and May 2023.
The court's reasoning turned on a question of time. For a discount to be genuine, O'Bryan ruled, the higher 'was' price must have been in place for at least twelve weeks before the promotion begins. When the ACCC presented fourteen sample products, thirteen failed that test. Only Nature's Gift Dog Food was spared — not because its pricing was clean, but because its promotional ticket carried no 'was' price at all.
Coles rejected the allegations before the ruling and continues to dispute the findings, suggesting the judgment exposes a gap in industry guidance rather than any intent to deceive. The company says it is reviewing the decision, even as it faces the prospect of substantial penalties and court-ordered corrective measures.
The ruling lands alongside a pending case against Woolworths, accused of similar conduct across 266 products over twenty months. Together, the two chains hold roughly two-thirds of Australia's grocery market, and both now face a regulator that has shown it is willing to go to court and prevail. For consumers, the judgment puts legal language to a suspicion long felt at the checkout: that the discount on the shelf is not always what it claims to be.
Australia's federal court has found that Coles, one of the country's two dominant supermarket chains, systematically misled shoppers with discount promotions that were not what they appeared to be. The ruling, handed down Thursday by Justice Michael O'Bryan, centers on the supermarket's "Down Down" campaign—a marketing push that promised savings on hundreds of everyday items but, according to the court, delivered no genuine discount at all.
The Australian Competition and Consumer Commission, the country's consumer watchdog, brought the case after investigating what it saw as a bait-and-switch tactic. Coles would temporarily raise the price of a product, then advertise a "Down Down" promotion that brought the price back down—making it look like a bargain when customers were simply returning to the original cost. The ACCC identified 245 products caught in this pattern between February 2022 and May 2023, items ranging from toothpaste to biscuits, spanning fifteen months of trading.
When the ACCC presented fourteen sample products as evidence, the judge found that thirteen of them failed to represent a genuine saving. The court's reasoning was straightforward: for a discount to be honest, the product must have been sold at the higher "was" price for a meaningful period first. O'Bryan set that threshold at twelve weeks minimum. Without that sustained period at the elevated price, the "Down Down" ticket would mislead an ordinary consumer into thinking they were getting a deal when they were not. Only one product in the sample—Nature's Gift Dog Food—escaped the ruling, because its promotional ticket did not include a "was" price at all.
Coles rejected the allegations before the judgment and continues to do so now, saying it is reviewing the decision. The company issued a statement emphasizing that delivering value to customers has always been its priority, a claim that sits uneasily with the court's finding that its promotions were not genuine. The supermarket also suggested that the ruling highlights the need for clearer industry guidance on how long prices must be held at a higher level before a discount can legally be called a discount—a framing that positions the problem as one of ambiguous rules rather than deliberate deception.
The decision arrives amid a parallel case against Woolworths, Coles' main competitor, which together control roughly two-thirds of Australia's supermarket market. The ACCC has accused Woolworths of similar conduct, alleging it misled customers about 266 products over twenty months. A judgment in that case is expected later this year. Both chains have faced mounting pressure over the past year as regulators and politicians have scrutinized their pricing practices and market dominance, with accusations of price gouging adding to the reputational strain.
The Coles ruling is significant because it establishes a legal precedent for what constitutes a genuine discount in Australian retail. The twelve-week threshold is now a benchmark. More immediately, the court's finding opens the door to substantial penalties—the ACCC can seek damages, and the company faces potential fines and corrective measures. For consumers, the judgment validates a suspicion many have harbored: that supermarket promotions are not always what they seem. For Coles and Woolworths, it signals that regulators are willing to take them to court and win, and that the era of unchecked pricing power may be narrowing.
Notable Quotes
The Down Down tickets for the sample products would not have been misleading if the products had been sold at the 'Was' price for a minimum period of twelve weeks immediately preceding the Down Down promotion.— Justice Michael O'Bryan
Coles said its priority has always been delivering value to customers.— Coles statement
The Hearth Conversation Another angle on the story
So the court found that Coles was raising prices and then discounting them back. But didn't customers end up paying the same price they would have anyway?
Yes, exactly. That's the deception. The customer sees "Down Down" and a "was" price, and their brain registers savings. But Coles had artificially inflated that "was" price just weeks before. The discount is real in the math, but fake in the context.
And the judge said twelve weeks at the higher price is the minimum for a discount to be honest?
Right. The logic is that if a price has been genuinely established in the market for twelve weeks, then moving away from it is a real change. Anything less and you're just playing with numbers.
Why does it matter that both Coles and Woolworths are being investigated at the same time?
Because together they control two-thirds of the market. If both are doing this, it's not a rogue actor—it's systemic. It suggests the whole sector may have normalized the practice.
What happens now?
Penalties, almost certainly. And the Woolworths case will likely follow a similar path. But more broadly, this establishes a legal rule that retailers have to follow. The guessing game is over.