Coles and Woolworths may be in hot water as the consumer watchdog initiates legal action against them for allegedly misleading customers about discounts on everyday items. If found guilty, the supermarkets could face significant penalties, raising concerns about transparency in pricing and the trust of Australian shoppers.
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00:00Here's one example of what Woolworths was doing according to the Consumer Watchdog.
00:07For about two years, a family pack of Oreos costs $3.50.
00:12Woolies then hiked the price up to $5 for 22 days, before moving it back to $4.50.
00:19The supermarket giant called it a price drop.
00:22And that was actually an over 20% increase, a 29% increase in price compared to the prior
00:29regular price.
00:31The lawsuits claim Woolworths did this over 20 months with more than 260 items, including
00:38Tim Tams, cat food and dishwashing liquid.
00:41And Coles did it over 15 months with more than 240 items, including Arnott Shapes, Band-Aids
00:48and Wee Bicks.
00:50When the discounts are not genuine, consumers are actually foregoing buying products at
00:54another store, which is offering genuine discounts.
00:57The allegations have landed with a thud for shoppers.
01:01They've taken advantage of a situation.
01:03Oh, dreadful.
01:04I mean, I can hardly afford to go shopping.
01:06It should be a fairly hefty fine.
01:08If proven, the supermarkets face penalties of up to $50 million for every breach of consumer
01:14law.
01:15The penalty has to be high enough to be not a cost of doing business for such major companies,
01:21to deter them from this conduct in the future and deter all retailers.
01:25Customers don't deserve to be treated as fools by the supermarkets.
01:30The ACCC is already in the middle of an inquiry probing pricing practices and competition
01:36in the highly concentrated sector.
01:38There needs to be more transparency around supermarket pricing and it should be much
01:43easier to be able to track price changes over time.
01:47Their price gouging has also put upward pressure on inflation and therefore interest rates.
01:52Neither company fronted up to cameras today.
01:55Coles said it will defend the case and that rising costs had caused some increased prices,
02:01while Woolworths said it will carefully review the ACCC's claims.