SYDNEY, 25 February 2026 – The high-stakes Federal Court battle between the Australian Competition and Consumer Commission (ACCC) and Coles Supermarkets has reached a critical juncture today, as the consumer watchdog delivered its closing submissions in a case that could redefine Australian retail pricing.
The ACCC alleges that Coles engaged in deceptive pricing practices by artificially inflating the prices of 245 everyday products for a short period before placing them on “Down Down” promotions. The watchdog argues these discounts were “illusory,” as the promotional price was often higher than, or equal to, the original long-term price of the item.
“Up, Down, Prices are Up”: ACCC’s Final Arguments
During today’s proceedings, the ACCC’s legal team argued that the “Down Down” slogan was not merely a “meaningless phrase” but a deliberate attempt to dupe customers into believing they were receiving a genuine bargain. The commission contends that Coles systematically jacked up prices on items—including toothpaste, cheese, and shampoo—for a brief window to create a false baseline for subsequent discounts.
Internal emails aired in court earlier this week suggested a “race to the bottom” mentality, with some managers admitting that price increases were coordinated with suppliers specifically to facilitate the “Down Down” claim later. The ACCC is seeking penalties that could exceed A$150 million if the court finds the supermarket giant breached Australian Consumer Law.
Coles Hits Back: The Inflation Defence
Coles has steadfastly denied the allegations, maintaining that its pricing decisions were “complicated” but not misleading. Lead counsel for Coles, John Sheahan KC, argued today that the price increases were a necessary response to soaring inflation and rising supplier costs rather than a calculated ploy to deceive.
The supermarket giant maintains that the “Down Down” promotions were “fair dinkum” and that prices were often set months in advance. However, Justice Michael O’Bryan today questioned the ACCC’s case, probing whether customers truly interpreted the “Down Down” signage as a guarantee of the lowest historical price or simply a current reduction from the immediate prior price.
Case Overview and Alleged Misconduct
The following table outlines the core components of the ACCC’s legal action against Coles as presented in the Federal Court.
| Category | Details of Allegation/Fact |
|---|---|
| Number of Products | 245 specific items (including dairy, hygiene, and pantry staples) |
| Alleged Practice | “Illusory” discounts following temporary price spikes |
| Relevant Period | September 2021 to May 2023 (as per class action filings) |
| Potential Penalties | Estimated at A$150M+ |
| Key Slogan | “Down Down” |
Broader Impact on the Supermarket Sector
The legal scrutiny comes at a sensitive time for the Australian grocery sector. While Coles defends its practices in court, its primary competitor, Woolworths, reported a 16% jump in profits today, reaching A$859 million for the past six months. Both retailers are facing a separate class action regarding deceptive pricing, and consumer advocacy group CHOICE has called for an immediate end to “pricing tricks” that exploit household budgets during a cost-of-living crisis.
The Federal Court case is expected to conclude its final hearings this week, with a judgment reserved for a later date. The outcome will likely set a significant legal precedent for how “was/is” pricing and promotional slogans are regulated in Australia.
Frequently Asked Questions
What exactly is the ACCC accusing Coles of doing?
The ACCC alleges that Coles raised the prices of hundreds of products for a short period (often after they had been at a stable price for six months) before lowering them slightly and marking them as a “Down Down” discount. The watchdog claims the “discounted” price was often still higher than the original long-term price.
How has Coles responded to these claims?
Coles argues that price changes were driven by inflation and requests from suppliers to increase wholesale costs. They maintain that their marketing was not intended to mislead and that the pricing structures are more complex than the ACCC suggests.
What happens if Coles loses the case?
If found guilty of misleading or deceptive conduct, Coles faces massive financial penalties, potentially exceeding A$150 million. It could also lead to court-ordered consumer redress and a mandatory overhaul of how the supermarket displays and advertises discounts.
Are other supermarkets involved?
Yes. While the current trial focuses on Coles, the ACCC has also initiated similar legal proceedings against Woolworths regarding their “Prices Dropped” campaign. Both retailers are also facing a combined class action lawsuit on behalf of consumers.