An Australian federal court has found Coles, the country's second-largest supermarket chain, guilty of misleading consumers through its "Down Down" promotional pricing campaign — a landmark ruling with sweeping implications for the retail industry. Justice Michael O'Bryan handed down his judgment in a Melbourne courtroom on Thursday, finding that Coles had breached Australian consumer law by advertising discounts that were not genuine.

The case, brought by the Australian Competition and Consumer Commission (ACCC), centred on a pricing strategy used between February 2022 and May 2023, in which Coles temporarily raised the prices of at least 245 products — ranging from Rexona deodorant and Arnott's Shapes biscuits to Karicare baby formula and two-litre bottles of Coca-Cola — before placing them on "Down Down" promotions at prices equal to or higher than their original level. The promotional tickets displayed a higher "was" price alongside a lower "is" price, creating the impression of a genuine saving. Critically, however, the "was" prices had only been in place for a median period of just 28 days before the supposed discount was applied. Justice O'Bryan found that 13 of the 14 sample promotional tickets examined had not offered genuine discounts, ruling that an ordinary customer would not have considered the savings real had they known how briefly the higher price had been in effect.

Coles had argued in its defence that the price increases reflected genuine rises in wholesale costs from suppliers during a period of high inflation, and that its "was/is" tickets were strictly accurate. The judge acknowledged that inflation had played a role and did not find that Coles had artificially inflated prices — a distinction that could limit the eventual size of its penalty. Nevertheless, O'Bryan concluded that a price must be in place for a minimum of 12 weeks before a subsequent reduction can be legitimately promoted as a discount. That 12-week benchmark, which matched Coles' own internal compliance policies introduced in early 2022, is expected to set a significant precedent across Australian retail. The court also noted that Coles had relaxed its own guardrails in March 2022, reducing the required price-establishment period to just four weeks, apparently in response to competitive pressure from rival Woolworths — a move the judge described as contributing to a "race to the bottom" in consumer law compliance.

Coles now faces substantial financial penalties. The maximum under Australian consumer law is A$50 million per breach, meaning total fines could run into hundreds of millions of dollars. The ACCC and Coles have been given until 29 May to agree on penalties and other orders, which may include a donation to Foodbank, the food relief charity. A separate class action by customers will be heard at the same time. Coles has said it is "reviewing the judgment", leaving open the possibility of an appeal. ACCC chair Gina Cass-Gottlieb said the regulator would seek a "substantial" penalty that could not be dismissed as merely a cost of doing business.

The ruling carries broader significance beyond Coles itself. The ACCC has brought a parallel case against Woolworths, Australia's largest supermarket, on similar grounds; Justice O'Bryan is expected to rule on that matter later this year. Together, Coles and Woolworths account for around two-thirds of all supermarket sales in Australia, meaning most consumers in the country will likely have encountered the type of promotional pricing now under scrutiny. Legal analysts note that the decision places all Australian retailers — including petrol station operators, whose pricing the ACCC has also been tasked with monitoring — on notice that discount campaigns must reflect the genuine price history of a product, not just a fleeting spike engineered to make a routine price appear to be a bargain.