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<\/p>\nA former Coles manager has admitted the supermarket giant broke its internal guidelines by putting Arnott’s Shapes on a “Down Down” promotion faster than what was allowed, blaming “human error.”<\/p>\n
The admission came on the third day of the bombshell federal court case.<\/p>\n
The Australian Competition and Consumer Commission (ACCC) is suing Coles in a lawsuit described as “the case of the century” by a former ACCC boss.<\/p>\n
The consumer watchdog has accused Coles of a “planned” campaign to mislead customers with fake or “illusory” discounts on hundreds of common household items.<\/p>\n
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The ACCC claims the supermarket giant increased prices briefly before promoting them at an “illusory” reduced price. (ABC News: Billy Cooper)<\/p>\n
It claims the supermarket giant jacked up prices briefly before dropping them and including the items in the “Down Down” promotion.<\/p>\n
Legal counsel for the ACCC, Garry Rich, pressed former Coles manager Rebecca Thompson about the prices the supermarket giant charged on Arnott’s Shapes Multipack 375g Variety Pack.<\/p>\n
The former biscuits and cookies category manager was asked about negotiations between Arnott’s and Coles after the supplier pushed to increase the price of Shapes biscuits from $5.<\/p>\n
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The court heard the supplier was negotiating a price increase after the product had been sold as a “Down Down” special for more than 340 days. (ABC News: Patrick Stone)<\/p>\n
The product had been sold at this price on a “Down Down” promotion for more than 340 days until May 2022.<\/p>\n
They agreed to increase the price to $5.50 in a “Down Down” promotion.<\/p>\n
However, under Coles internal guidelines or “guardrails” that couldn’t happen straight away.\u00a0<\/p>\n
The guardrails were meant to ensure a “was” price was in place for four weeks before it could be on a “Down Down” discount to ensure they didn’t mislead customers.<\/p>\n
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Coles argues it was hit with an unprecedented number of price increases by suppliers. (ABC News: Billy Cooper)<\/p>\n
That’s because on the pricing ticket in the supermarket, a shopper would be shown a “was” price of $6.50 and a discounted price of $5.50.<\/p>\n
But Coles didn’t do that \u2014 it sold Shapes at $6.50 for one week, then discounted it by 30 per cent the next week, then sold the product at $6.50 for another two weeks before putting it on a “Down Down” ticket for $5.50.<\/p>\n
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Rebecca Thompson said a Coles and Arnotts agreement failed to follow pricing “guardrails”.\u00a0 (LinkedIn)<\/p>\n
Mr Rich pushed Ms Thompson about whether she accepted Coles had broken its own guidelines by moving too quickly.<\/p>\n
“You accept, don’t you, that that was not in accordance with the guardrails?” He asked.<\/p>\n
“Yes, it was an error,” she responded.<\/p>\n
The ACCC alleges in the Shapes example that shoppers weren’t getting a discount at all \u2014 despite what the price tag suggested.<\/p>\n
It claims Coles’ “Down Down” pricing was misleading because shoppers handing over $5.50 paid an extra 50 cents compared to the earlier “Down Down” price from one month prior of $5 \u2014 an increase of 10 per cent.<\/p>\n
Coles disputes this.<\/p>\n
Here’s what’s at stake when the ACCC takes Coles to court<\/a><\/p>\n The “case of the century” is set to play out in the federal court this month, with the ACCC taking on supermarket giant Coles for what it claims are “illusory” discounts.<\/p>\n In another tense exchange, Ms Thompson was asked about an internal email from a member of the price and value team.<\/p>\n The man writing to her provided the dates about when a “Down Down” promotion could be implemented for the Arnott’s Shapes, in accordance with the internal guidelines.<\/p>\n Ms Thompson appeared to dispute whether she was sent the correct dates.<\/p>\n However, Mr Rich pushed back against that.<\/p>\n “What he told you was strictly correct, I suggest?”<\/p>\n “No, because it wasn’t part of the guardrails.”<\/p>\n “OK. You say that it’s his fault?”<\/p>\n “No, I’m saying it’s human error. It was an error.”<\/p>\n “But he sent you the guardrails, correct? He sent you the relevant part of the guardrails, right?”<\/p>\n “I missed that at the time, so yes.”<\/p>\n Ms Thompson said Coles also had to factor in a discount promotion with Arnott’s that ran twice a year, which had contributed to the problem.<\/p>\n The ACCC is seeking to prove that Coles misled shoppers because the products were sold at one regular price for at least six months before being jacked up for a brief period and then reduced as part of a “Down Down” promotion.<\/p>\n Do you have a story about a company misleading consumers? Email specialist.team@abc.net.au<\/a><\/p>\n Shoppers thought they were getting a bargain, but they were paying either the same amount or more than the product’s regular price, the ACCC claims.<\/p>\n