Melbourne, May 16, 2026, 09:04 AEST
Coles Group Ltd is facing penalties after Australia’s Federal Court ruled its “Down Down” price campaign misled shoppers about grocery price drops. The ACCC said the case involved 245 items, with the court finding false or misleading claims on some tickets. ACCC
Supermarket pricing is back in the spotlight in Australia, where Coles and Woolworths hold most of the market and families face cost-of-living strain. The decision could push grocers to change “was/now” price labels, which show current prices against earlier, higher ones. Reuters
Woolworths Group is feeling more heat after the Coles ruling, with the ACCC also running a Federal Court case over similar behaviour and no decision yet. Investors are watching to see how far supermarkets can shift prices and still claim discounts under the Australian Consumer Law, which bans misleading conduct.
Coles raised prices on some products by at least 15% before advertising them as “Down Down” specials that were still at or above prior shelf prices, the ACCC said. The watchdog named goods such as biscuits, toothpaste, baby formula, noodles, tissues, and pet food. ACCC
Justice Michael O’Bryan said 13 out of 14 sample tickets misled buyers since the goods hadn’t actually been sold at the advertised “was” price for a reasonable time. The court noted that keeping the higher price for 12 weeks would have stopped the misleading impression for those goods. Federal Court Judgments
Coles said in its ASX statement that the court linked all the price rises to supplier cost hikes, calling them commercially justified. But the court said Coles needed a 12-week price-establishment period before bringing products back to “Down Down”. Coles said it’s reviewing the decision.
The ASX was closed over the weekend. The most recent Coles trade shown on its investor site is from Friday’s close—A$20.81, up 0.7% for the session, volume of 2.82 million shares. Reuters said shares dropped 2.7% after Thursday’s decision.
Coles shares took a hit after the court decision, with the move “the trigger for the weakness,” Vantage Markets analyst Hebe Chen told Reuters. Investors are now worried Coles’ “discounting playbook becomes less flexible,” she said, with the market looking beyond the court headline. Reuters
The ACCC sued Coles after finding its pricing practices could have made it tough for shoppers to spot real bargains on key household items, chair Gina Cass-Gottlieb said. The watchdog said penalties and other orders would come at a later stage.
Industry and legal experts saw the ruling as extending beyond a single supermarket. Allan Fels, former ACCC chair, told the Guardian it would “reduce the amount of fake discounts.” Jeannie Paterson, law professor at the University of Melbourne, said the decision pushes back on the old “buyer beware” principle in Australia. The Guardian
Coles lost the court case as business momentum stayed uneven. On May 1, Coles said third-quarter supermarket sales were up 4.0% at A$9.78 billion, with e-commerce jumping 24.8%. CEO Leah Weckert pointed to “value and availability” as top issues for shoppers this year, with more customers eating in.
The financial impact is still uncertain. The Federal Court told the sides to propose orders by May 29, or file short submissions by June 5 if they disagree. The matter returns to court for case management on June 10. A class action over similar claims is also on the docket. If penalties stay low, share losses could be limited; but if Coles faces more penalties and refunds, its pricing reset costs will rise.
