When “Down Down” wasn’t really down - Federal Court rules against Coles

In its judgement delivered on 14 May 2026, the Federal Court has found that Coles engaged in misleading conduct in relation to its long-running “Down Down” promotion, accepting the ACCC’s case that many advertised discounts were not genuine. The Court held that 13 of the 14 sample “Down Down” tickets examined in the hearing conveyed false or misleading price discount representations because the stated “was” price had not applied for a reasonable period before the promotion. The decision is significant because it clarifies how courts are likely to assess “was/now” price advertising under the Australian Consumer Law, particularly where a retailer temporarily increases prices shortly before promoting an apparent discount.

Background to the proceedings

The ACCC commenced proceedings against Coles in September 2024, alleging contraventions of the Australian Consumer Law arising from pricing representations made between February 2022 and May 2023. The regulator alleged that Coles had used its prominent “Down Down” campaign to present consumers with illusory discounts on 245 common supermarket products, including grocery, household and personal care items. According to the ACCC, many of those products had been sold for extended periods at a stable regular price, then increased by at least 15 per cent for a relatively short period, before being placed on “Down Down” at a price that was lower than the temporary spike price but still the same as, or higher than, the earlier regular price.

The alleged representations were made through in-store and online pricing tickets, typically showing a promotional price alongside a higher “was” price and the date on which that higher price had applied. The ACCC’s case was that ordinary consumers would understand the “Down Down” signage as indicating a genuine reduction from the product’s recent regular selling price. To decide the first stage of the case, the Court looked at a sample of products and promotional tickets taken from the 245 products identified by the ACCC, including some products that had been placed in the “Down Down” campaign more than once.

Coles said the price increases were justified, pointing to higher supplier costs during a time of rising inflation. But the Court said that was not the main issue. The real question was whether the “Down Down” tickets gave shoppers the impression they were getting a genuine discount from a normal earlier price. In the end, the case focused less on why Coles raised prices and more on whether the later promotions created a misleading impression about the savings on offer.

Key findings of the judgment

The judgment contains a number of important findings about price representations, consumer impression, and the proper use of comparative pricing in retail promotions. The key findings are summarised below:

• The Court found that 13 of the 14 “Down Down” price tickets looked at were misleading because the higher “was” price had not been used for long enough before the promotion started.

• The key issue was how an ordinary shopper would understand the promotion. The Court accepted that most people would see “Down Down” as a real discount, not just a drop from a short-term price rise.

• A short-lived price increase could not be used as the basis for claiming a genuine discount if it did not reflect the product’s usual selling price.

• The Court said the “was” price would likely not have been misleading if the product had been sold at that price for at least 12 weeks. The Court noted in this part of the decision that until early 2022, Coles had an internal policy that a product should not be placed on “Down Down” unless it had been sold at the higher “was” price for at least 12 weeks. Whilst Coles later relaxed that requirement in an effort to be more competitive with Woolworths, the earlier policy was an important indication that Coles itself had recognised the need for a meaningful period at the higher price before representing a subsequent reduction as a genuine discount. This part of the decision may be important in future pricing cases.

• Coles argued that rising supplier costs explained the higher prices, but the Court said that did not change the fact that the discount claims could still mislead shoppers.

• The decision makes clear that businesses cannot rely on a briefly higher price to promote a discount if that creates a false impression about the savings.

• At this stage, the Court has only decided that Coles is liable. The question of penalties and any other orders will be dealt with later.

Consequences for Coles?

As to consequences, the judgment exposes Coles to potentially very substantial financial penalties, although the Court has not yet determined what penalty should be imposed. The applicable maximum penalty for a corporation is the greater of $50 million per contravention, three times the value of any benefit reasonably attributable to the contravening conduct, or, if that benefit cannot be determined, 30 per cent of Coles’ adjusted turnover during the relevant breach period. The ACCC has indicated that penalties and other relief will be the subject of a later hearing, so while the ultimate figure remains uncertain, the judgment creates exposure to penalties that could be very significant if multiple contraventions are established for penalty purposes.

Proceedings against Woolworths

The Coles proceeding is not the only supermarket discount-pricing case before the Court. The ACCC has also commenced separate proceedings against Woolworths in relation to allegedly similar conduct concerning its long-running “Prices Dropped” campaign. In that case, the ACCC alleges that over a 20-month period between September 2021 and May 2023, Woolworths temporarily increased the prices of 266 products for an average period of 45 days or less, before placing them on “Prices Dropped” promotions at prices that were lower than the temporary spike price but higher than, or the same as, the products’ earlier regular prices. The ACCC further alleges that, in many instances, the temporary price increases were used to establish a higher “was” price and thereby create the appearance of a genuine discount. Those proceedings raise closely related issues under the Australian Consumer Law, but they are being heard separately and will be determined at a later date.

The Court’s decision against Coles sends a clear message to retailers: discount advertising must reflect real savings, not just clever pricing tactics. Businesses using “was/now” or similar promotions need to make sure the earlier price is genuine and has been in place for long enough before a sale begins. For shoppers and regulators, the ruling is an important step in making sure price promotions are clear and honest at a time when many households are feeling cost-of-living pressure.

Author: Karen Wong

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.