A rising number of “angry customers are lining up” to seek compensation from Coles and Woolworths, as court decisions loom in the legal action brought by the Australian Competition and Consumer Commission (ACCC).
Both supermarkets have been accused by the ACCC of breaching Australian Consumer Law by misleading shoppers through discount-pricing claims — including the “Down Down” and “Prices Dropped” promotions — on hundreds of common supermarket products.
The ACCC case against Coles ended in February, while its prosecution of Woolworths is currently before the Federal Court.
Earlier this week, Gregory Mackey, Special Counsel at GMP Law, suggested impacted customers could be eligible for a refund of between $200 and $1,300, depending on their spending habits.”
He said that if Woolworths and Coles are found liable, there will be a judgment in favour of both class actions, leading directly to a damages assessment.
But this week, Carter Capner Law director Peter Carter said those figures might even be conservative, arguing “compensation should be much higher”.
His firm’s case will go further than the ACCC action, targeting losses beyond just the products allegedly temporarily increased by 15 per cent before being discounted as part of the promotions.
“We believe the case is much larger than this, and the compensation also should be much higher, because the supermarkets gained more overall business directly due to these campaigns,” he said.
“Shoppers were lured to their outlets by the deceptive promotion to open their wallets,” he alleged.
“They must be held to account for the entirety of the super profits they reaped, not just the gains on the goods they chose to headline the campaign.”
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The ACCC has taken Woolworths to the Federal Court over allegations of deceptive price tactics. Source: Newswire/Choice
Tens of thousands of Coles and Woolworths shoppers rise up
One example cited by the ACCC from September 2021 to May 2023 involves Woolworths allegedly lifting the price of an Oreo Family Pack from $3.50 to $5.00 for 22 days, before reintroducing it under a “Prices Dropped” promotion at $4.50 — still 29 per cent higher than the original price.
Carter, a former national president of the Australian Lawyers Alliance and a director of the Civil Justice Foundation of Australia, said more than 30,000 consumers have registered with Carter Capner Law to seek compensation, and encouraged others to join.
That’s on top of the 50,000 registered with GMP Law.
“Our estimates suggest that households could claim between $2,000 and $5,000, depending on the amount spent and the impact of the deceptive pricing,” Carter said.
He said the claim would not be filed until after the ACCC judgment is handed down, to minimise legal costs associated with the class action.
“Our objective is to demonstrate the power consumer litigation can deliver to counter egregious corporate conduct by delivering the maximum amount of potential compensation to Coles and Woolworths customers.”
If the ACCC is successful, the court may impose civil fines or penalties, as well as corrective or other orders on the supermarket chain.
However, while regulatory penalties serve a purpose, they do not “automatically return money to the people who paid inflated prices”, Gerard Malouf from GMP previously said.
50,000 Australians are part of a class action led by Gerard Malouf and Partners against the supermarket. Source: GMP Law/Getty
What is the latest with ACCC’s claim against Coles?
According to Mackey, there has yet to be a liability judgment against Coles.
“It is not known when judgment will be delivered,’ he said, estimating it could be “many months” before a judgment is delivered in the case of either Coles or Woolworths.
“We have no doubt that Woolworths and Coles are treating the ACCC proceedings and the class action proceedings very seriously,” said Mackey.
“The proceedings are meant to send a message to Woolworths and Coles about their pricing practices. It is up to the supermarkets to decide their course of action in the future.”
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