Judge says ‘absurd’ to argue over all 250 grocery products identified as ‘fake’ by ACCC

The judge hearing the ACCC’s case against Woolworths and Coles over alleged fake discounts says it’s ‘absurd’ to argue over all 250 grocery products identified as ‘fake’ by the regulator as the case snakes its way through the Federal Court.

Woolworths CEO Amanda Bardwell, ACCC chair Gina Cass-Gottlieb and Coles CEO Leah Weckert.

Federal Court Justice Michael O’Bryan has called on the competition regulator, Woolworths and Coles to work on a set of agreed facts around the case involving the supermarkets allegedly using fake discounts to lure in shoppers, saying it would be “absurd” to have a trial for each 250 grocery products caught up in the scandal.

Speaking to parties at a case management hearing on Wednesday, Justice O’Bryan said it was unlikely and “absurd” for the trial to cover all 250 products highlighted by the Australian Competition & Consumer Commission in its case against Woolworths and Coles.

“It seems unlikely that we will have a trial over all 250-odd products about essentially the same sorts of issues, and the question that is on my mind is whether and at what point in time the parties will give consideration to trying to identify samples of factual situations or circumstances in which the relevant issues have to be determined for the purposes … of a trial,” Justice O’Bryan said.

He communicated to the lawyers for Woolworths and Coles, as well as the ACCC, it would be smarter to focus on a select number of grocery products at the core of the case as he seeks to run the case in an orderly and efficient manner.

“It just seems rather absurd to me that we would do this over 250 products, with 250 conversations which 90 per cent of them might all be the same character, but I accept 10 per cent might be of a different character. If we are going to be practical about this, and obviously any trial ought to be conducted efficiently, then at some point it seems to me if the parties are talking about agreed facts about these events and these circumstances the parties have got to be turning their minds also to categorising to the extent they can.”

The trial, set for early next year, will be a blockbuster case where the powerful ACCC will face off against the nation’s two most powerful supermarket chains.

Woolworths and Coles have claimed the initial price hikes for the food and grocery items identified by the ACCC were pushed by suppliers asking for price rises to cover costs, with these 250 products later discounted. The ACCC is claiming the discounts were fake or illusory.

In late September, Woolworths and Coles were hit with claims they promoted “misleading” or “illusory” discounts on hundreds of common supermarket products.

ACCC chair Gina Cass-Gottlieb has called the discounts offered by Woolworths and Coles “illusory”. Picture: Aaron Francis

The ACCC alleges a breach of the Australian Consumer Law by “misleading consumers through discount pricing claims” on the products.

ACCC chair Gina Cass-Gottlieb said the Coles and Woolworths discounts “were, in fact, illusory”.

“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,” Ms Cass-Gottlieb said.

In response to the allegations, recent defence papers lodged by Coles claimed products marked on sale in its Down Down promotion “accurately conveyed that the price of the product had been reduced to the Down Down Price from its previous ‘white ticket’ non-promotional price”.

“Coles denies that the discount for affected products at Down Down program prices was illusory,” the company’s concise statement read.

As well, the retail giant said prices of its goods were increased after requests from suppliers.

“This proceeding relates to a period of time when Coles and its suppliers were experiencing significant cost increases including, but not limited to, a surge in global commodity prices, and in the cost of packaging, freight, utilities and international shipping,” the Coles court documents said.

Coles boss Leah Weckert appearing before the ACCC supermarkets inquiry in November.

“In response to requests from its suppliers for cost price alterations (CPA) or changes to the promotional funding arrangements, Coles together with the supplier reassessed the promotional and non-promotional pricing of the supplier’s products, including in relation to the 245 affected products (that are) the subject of this proceeding.”

Woolworths similarly said price increases were spurred on by its suppliers, “with cost price increase requests being made at four to five times the rate received pre-Covid”, according to its defence papers.

Woolworths CEO Amanda Bardwell. Picture: 9NEWS

“Following those cost price increases, Woolworths sold products at particular retail prices for a period of time. The prices were genuine prices and many units were sold at those prices,” the papers said.

The allegations relate to products sold by Woolworths and Coles at regular long-term prices, which remained the same, excluding short-term specials, for at least six months and in many cases for at least a year.

The case is continuing.

After Justice O’Bryan issued some orders to further along the ACCC case, he then heard from lawyers representing class actions against Woolworths and Coles on behalf of consumers seeking compensation from the alleged fake discounts.