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Legal action flagged over Coles, Woolworths ‘deceptive’ pricing tactics

The ACCC says it is looking into misleading “was/now” labels and pricing “specials” advertised by the supermarket giants.

The major supermarkets have been put on notice by the consumer watchdog over “deceptive” pricing tactics, as Aussies battle higher grocery costs at the checkout.

The Australian Competition and Consumer Commission (ACCC) flagged it was “carefully looking” at potential legal action against the supermarket giants, and warned all large businesses it was “watching their actions”.

“The ACCC will not hesitate to take action against large suppliers who are misleading customers about prices,” an ACCC spokesperson told Yahoo Finance.

Coles and Woolworths
Supermarket giants Coles and Woolworths have been put on notice by the ACCC. (Source: Getty)

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The ACCC only has limited power to consider claims of price gouging, but the spokesperson noted it could seek to take action on issues like misleading and deceptive advertising, under the Australian Consumer Law (ACL).

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“For some time now, we have been closely considering the reports received from consumers alleging false or misleading ‘was/now’ or other pricing ‘specials’ advertising by supermarkets, and whether they may raise concerns under the ACL. These assessments are ongoing, so we are unable to comment further at this stage,” the spokesperson said.

“Was/now pricing” can be deceptive if a supermarket claims to offer a discount on a certain product but it has increased the price on that product briefly before the sale.

Another example is when items marked as on “special” are just the normal price.

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Social media has been full of shoppers showing examples of alleged Coles and Woolworths price tag discrepancies.

Coles, for example, came under fire last year after a customer shared a video of a Vegemite squeeze bottle on “special” for $7.30, when the regular price tag behind the label was $7. Coles said this discrepancy was due to a ticketing error.

Coles Vegemite prices
One customer took to social media to share this "special" at Coles. (Source: TikTok)

The ACCC was yet to give a hard timeline for the potential legal action but indicated it could be within the next 12 months.

“Taking legal action requires careful investigation and gathering of evidence, and it is difficult to predict the timing of any potential action,” the spokesperson told Yahoo Finance.

What do Coles and Woolworths say about pricing issues?

A Coles spokesperson said the supermarket did not comment on “day-to-day interactions with regulators”.

“Coles is not aware of any actual or threatened regulatory litigation in relation to pricing issues,” the spokesperson told Yahoo Finance.

A Woolworths spokesperson said it was aware Australians were “feeling the strain of the cost of living” and it was working to deliver relief.

“We work hard to ensure we comply with all Australian consumer laws and communicate our prices clearly and accurately through our catalogue, in store and online,” the spokesperson told Yahoo Finance.

“As we start to see the rate of inflation ease, we will continue to focus on delivering savings to our customers.”

Grocery prices rise

The ACCC said it was “very conscious” that grocery prices were a concern for many Aussie consumers. It said it was "closely watching" competition and potential mergers in the supermarket sector.

Food and non-alcoholic beverage prices rose 4.6 per cent in the 12 months to November, according to the latest Australian Bureau of Statistics (ABS) inflation data. This was down from a 5.3 per cent annual increase in October.

Annual food inflation remains elevated for most categories, the ABS noted, with the exceptions being fresh food such as meat and seafood and fruit and vegetables, thanks to favourable weather conditions.

The federal government has announced a review into the grocery code of conduct, appointing former Labor minister Dr Craig Emerson as the head.

A separate senate inquiry, led by the Greens, is also set to probe allegations of price gouging by the supermarket giants.

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