Coles’ Down Down Discounts In Court Showdown

Shoppers may be familiar with Coles’ catchy “Down Down, prices are down” jingly which has become synonymous with promoting lower prices and cheaper products.

Now, the grocery giant’s snappy slogan is at the centre of a landmark Federal Court trial, in what former consumer watchdog chief Professor Allan Fels has described as the “case of the century”.

ACCC’s action against Coles

The Australian Competition and Consumer Commission (ACCC) alleges the campaign misled customers about the pricing of 245 products, including paper towels, dog food and yoghurt, between February 2022 and May 2023.

The regulator claims Coles made false or misleading representations through its “Down Down” advertising, creating the impression that customers were receiving genuine discounts when, in some cases, they may have been paying more.

According to the ACCC, Coles promoted “illusory discounts” by selling products at a regular price for at least 180 days (known as Price 1), increasing them for a short period of maximum 45 days (Price 2), then advertising a “Down Down” price (Price 3) that appeared to be a bargain.

In reality, the consumer watchdog says the “regular” pricing periods were much longer, and the higher price periods much shorter, than customers were led to believe, giving the impression of a discount that may not have been genuine.

“The ‘Down Down’ ticket included and relied upon by the ACCC at page 4 of its submissions filed in Federal Court Submissions on 12 February 2026”

“Disguised price increases”

In its opening submissions, the ACCC described Coles’ conduct as “disguised price increases”, arguing the supermarket’s promotional tickets created the impression that the “Down Down” price represented a genuine reduction from a previous higher price.

One example raised in Court involved Karicare Follow On Formula. The product had sold for $18.00 over 794 days before being increased to $24.00 for just 23 days and then promoted under the “Down Down” banner at $21.00.

At a time when households are under pressure from a cost‑of‑living crisis, many consumers may have believed they were paying less, when in fact the $24.00 price had existed for only 23 days, while the regular price for the preceding 794 days had been $18.00. The promotion therefore resulted in shoppers paying more than the longstanding price for almost the entiretyl of the 817 days preceding it.

Another example involved Coca-Cola.

The ACCC argued that shoppers viewing a “Down Down” price of $3.50 would believe that figure reflected a discount from its usual $4.40 price.

However, the $4.40 price had only applied for 42 days. For at least 239 days immediately prior, the regular price was $2.75. On the regulator’s case.  customers were paying about 27 per cent more than the drink’s actual normal price, despite being told it was cheaper.

Coles defends pricing practices

Coles has rejected the allegations, saying the “Down Down” discounts were not misleading.

The supermarket said the tickets simply flagged a drop from an item’s most recent non-promotional price and did not imply that earlier prices were maintained for any specific period.

It also said price changes reflected rising costs across the supply chain, including inflation and higher global prices for packaging, transport and raw materials.

Consumer Law

The ACCC alleges Coles breached two main sections of the Australian Consumer Law (ACL), namely section 18 which prohibits misleading or deceptive conduct, and section 29(1)(i), which prohibits the making of false or misleading representatives in trade and commerce.:

Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or is likely to mislead or deceive.

A person can also include a natural person, a company, a trust, an association, a charity, an agency, a partnership, an organisation, or any other form of corporate entity.

Engaging in conduct includes making representations, statements, predictions, and advice.

Conduct that is "misleading or deceptive" is when the overall impression of the conduct induces, or is capable of inducing, error in the mind of the ordinary or reasonable consumer. The Court examines the overall impression created, rather than isolated words or technical qualifications.

Section 29(1)(i) of the ACL prohibits a person, in trade or commerce, from making a false or misleading representation about the price of goods or services in connection with the supply or possible supply of goods or services, or in connection with the promotion of those goods or services

Hefty Penalties

If Coles is ultimately found to have made misleading representations or engaged in misleading or deceptive conduct, it faces huge fines of up to $50 million per contravention – not to mention the potential significant reputational damage and loss of consumer confidence.

While a few dollars here and there for a can of soft drink or household item may appear minor in isolation, the ACCC argues that misleading discount claims distort competition, diminish consumer trust and is vital in promoting market integrity and trust.

It is not the first time the ACCC has taken high-profile action against a major Australian company for misleading consumers.

In a separate case, Qantas, Australia’s largest airline, was ordered by the Federal Court to pay $100 million in penalties for selling tickets on flights it had already decided to cancel, and for failing to promptly notify affected customers.

The penalties were imposed after Qantas admitted breaching the Australian Consumer Law, with the airline and the ACCC jointly submitting that the amount was appropriate to deter both Qantas and other businesses from similar conduct.

The findings against Qantas demonstrate how seriously consumer protection law breaches are treated, especially when large corporations mislead customers who make everyday financial decisions, and many facing hardship.

The Coles trial continues.

The content in this Article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. It should not be relied upon as such. You should seek legal or other professional advice before acting or relying on any of the content.

ABOUT THE AUTHOR

Naomi Shivaraman  has been an award winning journalist and producer for 25 years. She joined BlackBay as the team’s Legal Affairs Strategist, a role created to utilise her combined legal and media strategy skills, helping clients and stakeholders navigate the court of public opinion.

Not only does she assist the team in a paralegal capacity on complex litigation matters, but she also provides reputational, media and communications counsel. For the past few years, Naomi has combined her law studies with a full-time career. Naomi will finish her Bachelor of Laws degree at Macquarie University next year.