The ACCC alleges Woolworths broke Australian consumer law by offering illusory discounts through its 'Prices Dropped' promotion program. According to the regulator, the reduced 'Prices Dropped' prices were often the same or higher than the original long-term shelf prices before temporary price increases.
Woolworths denies the ACCC's claims and says the regulator has misrepresented what drives prices at the shelf. The company argues price increases sometimes fell below suppliers' recommendations and occurred against a backdrop of rising inflation after the COVID-19 pandemic.
Whether ... the saving is ... real might depend upon a range of factors including the period [of time] in which the 'was' price had been in the market, but also including how was the 'was' price established.
The landmark trial between the ACCC and Woolworths began in the federal court in Sydney on Tuesday. Court documents show the products were sold at their first price for 180 days or longer, before their prices were increased by at least 15% but only for a period of 45 days or less. The product list was pared down to 12 agreed items to be scrutinized in court.
Woolworths dropped the 'Prices Dropped' marketing campaign after the ACCC brought legal action against it. The ACCC is not suggesting Coles and Woolworths colluded or engaged in anti-competitive behavior as part of the alleged misleading conduct.
To suggest ... Woolworths is engaged in an activity that is involved for them manufacturing prices to then show a drop, we say, just totally misrepresents the true nature of the commercial negotiation.
According to The Guardian - World, Justice Michael O'Bryan described that whether the saving is real might depend upon factors including how long the original price had been in the market and how that price was established. According to Daily Mail - News, Robert Yezerski described Woolworths' position that suggestions the company manufactured prices to show drops misrepresent commercial negotiations.
The Federal Court's final judgment on whether Woolworths' promotions violated consumer law remains pending. It is unclear how many of the 266 alleged products had 'Prices Dropped' prices that were actually higher than original long-term prices.