Woolworths and Coles are facing charges from the Australian Competition and Consumer Commission (ACCC) for allegedly misleading customers about the discounted pricing of their products.

The ACCC alleged that the supermarkets increased the prices of the products by 15 per cent for a brief period before being subjected to Woolworths’ ‘Prices Dropped’ and Coles’ ‘Down Down’ promotions.

This means that the resulting prices were lower than during the price spike but higher than or the same as the regular prices.

The allegations involve 266 products at Woolworths between September 2021 and May 2023 and 245 products at Coles between February 2022 and May 2023.

“We allege that each of Woolworths and Coles breached the Australian Consumer Law by making misleading claims about discounts, when the discounts were, in fact, illusory,” said Gina Cass-Gottlieb, ACCC chair.

“We also allege that in many cases both Woolworths and Coles had already planned to later place the products on a ‘Prices Dropped’ or ‘Down Down’ promotion before the price spike, and implemented the temporary price spike for the purpose of establishing a higher ‘was’ price.”

The ACCC filed separate proceedings in the Federal Court against Woolworths and Coles.

The ACCC seeks declarations, penalties, costs, and other orders. It also seeks Woolworths and Coles to each fund a registered charity to deliver meals to Australians in need, in addition to their pre-existing charitable meal delivery programs.

Both Woolworths and Coles acknowledged the ACCC’s announcement and asserted they introduced their promotions to help customers amid inflationary pressures.

“We remain committed to offering many ways for customers to save at the checkout, including thousands of weekly specials, everyday low prices on household essentials, a great value own brand range and through our Everyday Rewards program,” said Amanda Bardwell, Woolworths Group CEO.

Bardwell noted that Woolworths will continue to engage with the ACCC on the matter.

“Coles sought to strike an appropriate balance between managing the impact of cost price increases on retail prices and offering value to customers through the recommencement of promotional activity as soon as possible after the establishment of the new non-promotional price,” said Coles.

Coles said that it will defend its position in the proceedings.