ACCC takes Woolworths and Coles to court over discount claims

National consumer affairs reporter Michael Atkin takes us through the ACCC’s claim.

Transcript

00:00These very serious allegations are that Coles and Woolworths both did the same thing, essentially,

00:10that over a significant period for both of them, they had sold products at a particular

00:16price and then suddenly that product had increased sharply by, say, at least 15%, and that was

00:23only for a brief period before the price was cut and then was part of this discounting

00:30promotion that we've all seen in the supermarkets.

00:33And what the ACCC says is actually, when they had a look at the details, consumers were

00:39paying higher prices than the original price or substantially the same, and so they were

00:45misled by the supermarkets.

00:47The allegations cover household items, everyday products, from cat food to chocolates, the

00:54sorts of things that everybody would have in their trolley regularly.

00:58Let's hear from the ACCC chair herself.

01:02There is always a potential of class actions to take action in relation to consumers who've

01:09been harmed.

01:10We are seeking through the community service order in order to give to the community in

01:16the most needy members of our community redress.

01:20We will put to the court that there should be a substantial additional donation to charities

01:28that are providing food relief and meals in aid to needy families and that each of Coles

01:35and Woolworths are ordered to pay additional donations to support that.

01:40Still under consumer law, so in relation to just one breach, and as I've mentioned,

01:48this relates to hundreds of examples potentially, there's a penalty under consumer law, a maximum

01:55penalty of $50 million, and there's also new variations on that where the court can find

02:03that the companies have to pay three times the benefit they've obtained, or if they can't

02:08determine that, it can be 30% of the company's turnover during the relevant period.

02:15So substantial fines, and as we heard from the chair of the ACCC, she's saying those

02:21are necessary to make sure that it doesn't happen again with these companies, but also

02:26that it deters the other companies operating in Australia.

02:31And I should add that these are untested allegations, they need to be put before the court, and

02:37at this stage they are just allegations.

02:39They've had different responses, Coles has said that this occurred during a period where

02:45they were experiencing significant increases in pricing from suppliers and that they intend

02:51to defend the allegations, whereas Woolworths has said that it's reviewing what the ACCC

02:58is putting and that it's very concerned about the cost of living impact on shoppers at its

03:04supermarkets, and it will have more to say as part of the proceedings as they get across

03:10them.

03:11And the chair of the ACCC did say during her press conference that both supermarkets have

03:16said that they've stopped this practice, but she hasn't been able, she hasn't got information

03:23to ascertain as to whether that's true.

03:25So there's a lot to play out here and much of it will be in the court.