ACCC relies on consumers to set key enforcement priorities, chair says

Australia’s biggest supermarkets are under the pump from the competition watchdog, which says it relies on consumer tips to set priorities and kick off investigations.

ACCC chair Gina Cass-Gottlieb says it relies on consumer tips to set priorities and kick off investigations. Picture: Aaron Francis/The Australian

Consumer engagement is key to helping the Australian Competition & Consumer Commission set its enforcement priorities, chair Gina Cass-Gottlieb says on the back of a court case against Coles and Woolworths over allegedly fake consumer discounts.

Ms Cass-Gottlieb has hauled Australia’s two biggest supermarkets into the Federal Court, amid sensational claims their Down Down and Prices Dropped promotions were misleading.

“The complaints that come from consumers help us in two key ways. One, they help us see what’s happening and where might be the greatest harm. Secondly, we take that into account as we set our strategic enforcement priorities for the coming year,” she told ABC Radio National.

Sleuthing by social media users on Reddit and X tipped off the corporate watchdog about alleged fake discounting practices promoted by the supermarkets, Ms Cass-Gottlieb said.

“First of all, we had a heads-up that came from consumers calling in, but then when we looked at social media we found hundreds of reports on X, TikTok, Reddit. Lots on Reddit,” she said.

“What people there were doing was monitoring prices. They were reflecting … people’s sense that these were not genuine discounts. Some of the people on social media were doing their own monitoring in effect, and it was a very key indicator for us.”

While Coles and Woolworths monitor each other’s prices closely as competitors, there is no suggestion they colluded, Ms Cass-Gottlieb said.

She said millions of products were sold under the promotions in the relevant period and the ACCC considered hundreds of millions in revenue was made off them, but the watchdog does not currently have evidence to show how much profit was made.

“It is also the case when products go on special, there are higher volumes of sales,” she said.

If the Federal Court finds in the ACCC’s favour, Ms Cass-Gottlieb said the penalty should be higher than the cost of doing business for deterrence.

Off the back of calls from the Nationals and Greens to give the ACCC powers to break up the supermarkets to promote better competition, Ms Cass-Gottlieb said she would continue to push for reforms to merger laws.

“Australia is one of only three OECD nations that do not, as a mandatory matter, require notification (of mergers),” she said.

“With serial acquisitions … over time, cumulatively, it has a significant impact. We are prioritising merger reform for this sector.”

Ms Cass-Gottlieb urged for merger reform over divestiture powers.

Woolworths CEO Amanda Bardwell (left) and Coles CEO Leah Weckert.

“It’s about maintaining the competition we have now in key sectors and also allowing it to grow,” she said.

“As distinct from having a power where we would need to do a significant investigation and then find a contravention of the anti-competitive contravention of the act and then get a court to order divestiture.”

On Monday, the competition watchdog alleged both retail chains promoted “misleading” discounts on hundreds of common supermarket products including biscuits, batteries and dishwashing liquid.

The ACCC said the supermarkets offered some products at a regular price for at least 180 days. They then hiked the price of the product by at least 15 per cent for a relatively short period of time, before they lowered it on the Woolworths’ Prices Dropped promotion or Coles’ Down Down program.

The regulator alleged the display of the Prices Dropped and Down Down tickets was misleading because the price of the products was in fact higher than or the same as the regular price at which the supermarket had previously offered.

The ACCC claimed Woolworths applied the “misleading” promotion to 266 products between September 2021 and May 2023. It alleged Coles falsely discounted 245 products between February 2022 and May 2023.