MELBOURNE, May 15, 2026, 08:05 (AEST)
- A Federal Court judge ruled that 13 out of 14 tested Coles “Down Down” tags misled shoppers. ACCC
- The ACCC plans to pursue penalties at a later date, while Coles says it’s still reviewing the judgment.
- Woolworths is also caught up in a similar ACCC case, but a judgment hasn’t been handed down yet.
Coles Group Ltd is under increased legal and investor pressure after the Federal Court in Australia ruled that the company’s well-known “Down Down” discounts misled shoppers. The decision weighed on Coles shares and brought extra scrutiny to competitor Woolworths.
The timing of the ruling hits as Australia grapples with cost-of-living pressures. According to the Australian Competition and Consumer Commission, the case involves 245 everyday items Coles sold from February 2022 through May 2023. The Federal Court said Coles’ “Down Down” promotions were misleading on 13 out of 14 sample tickets reviewed at the liability hearing, the ACCC reported. ACCC
For investors, there’s more at stake than just potential fines. The decision could limit how a major grocer signals price drops following cost hikes from suppliers—a crucial tactic in supermarket merchandising, especially with shoppers already watching shelf prices closely.
Justice Michael O’Bryan ruled that Coles violated Australian Consumer Law by displaying tickets implying savings, despite the fact that items hadn’t actually been offered at the higher “was” prices for a sufficient duration. In his decision, O’Bryan wrote that the “discount represented on the ticket was not genuine.” Federal Court Judgments
Coles, in its ASX statement, noted the court determined every price hike was driven by supplier cost increases and had a commercial basis. Nonetheless, the court ruled that a 12-week “minimum price establishment period” needed to elapse before items could appear in “Down Down” promotions—so, that higher price had to hold on the shelf for those three months before it counted as the reference for any advertised discount.
The ACCC called the ruling a victory for shoppers. “We welcome the Court’s finding that Coles breached the Australian Consumer Law,” ACCC Chair Gina Cass-Gottlieb said. She noted the case shed more light on how Coles runs its discounting program. ACCC
Coles is looking at the judgment, the company said. In its filing, there’s no mention of a provision, settlement, or appeal—orders and penalties come next.
Coles shares slid 2.7% on the day of the decision, with Woolworths shedding 1.9%, according to Reuters. Hebe Chen of Vantage Markets called the court’s ruling “the clear trigger” for the drop. Still, she noted, some investors worry Coles might have less room to maneuver with its “discounting playbook.” Reuters
The competitive angle is hard to miss. Coles and Woolworths account for almost two-thirds of the Australian grocery market, Reuters noted. The ACCC, for its part, has its own Federal Court action running against Woolworths on related pricing allegations; judgment hasn’t landed yet.
But there’s a catch. O’Bryan described the ruling as “relatively narrow,” pointing out that Coles could have avoided misleading signage if it had kept the higher “was” price in place for 12 weeks. He also flagged that the issue of whether consumers suffered harm remains for the class action to resolve—and could come up in the ACCC case too, depending on the type of relief being sought. Federal Court Judgments
The Federal Court gave the parties until May 29 to file proposed orders, or until June 5 for written submissions if there’s no agreement. The case returns for further management at 10:15 a.m. on June 10.
Reuters quoted Cass-Gottlieb at a news conference saying the regulator is after a penalty that can’t just be shrugged off as a “cost of doing business.” For Coles, the issue now is less about bad optics and more about what the court sets as the price tag. Reuters
