Coles and Woolworths shoppers in for major payday if supermarkets found guilty of dodgy tactic
Shoppers of both Coles and Woolworths could be 'entitled' to money back if the supermarkets are found guilty of misleading pricing tactics.
Australian shoppers could be in for a payday if Coles and Woolworths are found guilty of misleading pricing tactics as an Aussie law firm launches a class action investigation against the supermarket chains.
Both supermarkets are accused of violating Australian consumer law by the consumer watchdog after allegedly making misleading discount pricing claims on hundreds of widely sold supermarket products with their "Prices Dropped" and "Down Down" sales campaigns.
GMP Law plans to seek refunds for affected consumers and recover the difference in price between the alleged discounted price and the original undiscounted price. "Consumers have the right to receive honest and transparent information about the products they purchase," chairman of GMP Law, Gerard Malouf said. "This investigation is an important step towards protecting those rights and ensuring that businesses adhere to fair trading practices."
The move is one Dr Joel Lisk, research fellow in law at Flinders University, says is "a positive". He told Yahoo News Australia "The ACCC proceedings aren't about getting refunds for customers," he explained. "But if they are successful it would mean customers have in theory been misled and deceived, and could be entitled to damages."
How will customers be refunded?
GMP Law's special counsel Diane Chapman explained to Yahoo there are three ways the firm is looking to have customers refunded if the major supermarkets are found guilty of alleged price manipulation.
"One will be through the data collected on their Woolworths and or Coles Rewards programs as they record all of the information regarding time and date of purchase, pricing and discounts," she said.
"The other will be by holding receipts of the discounted products, the other will be by signing a statutory declaration that the particular product was purchased during the relevant period and providing details of the product/s purchased. If there is a successful settlement, the firm intends to donate surplus funds to an Australian food charity.
Aussies to receive 'dollars and cents' out of 'billions'
The Australian Competition and Consumer Commission (ACCC) alleges the conduct involved 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months, something Dr Lisk told Yahoo "starts to add up" financially for consumers.
He added it is "hard to say" at this stage if financial penalties to businesses found guilty of wrongdoing would impact misleading and deceptive conduct in the future. "If [fines are] seen as just the cost of doing business it doesn't really dissuade businesses from engaging and misleading and deceptive conduct," he said.
"Seeking damages from business for the losses that individuals like us have incurred is one way of doing that. But of course, we're talking probably about dollars and cents in transactions when businesses like Coles and Woolworths deal in the billions."
Coles and Woolworths 'breach trust' of shoppers
The class action comes after Prime Minister Anthony Albanese warned that the major supermarkets breached the trust of everyday Aussies.
The Australian Competition and Consumer Commission interim report highlighted customer concerns on soaring prices at the checkout, a lack of competition and a loss of trust about specials or discount schemes. It was "a breach of trust" for supermarkets to behave like that, the prime minister told the media last week.
He said the findings released so far indicated supermarkets "need to do better". "When it comes to supermarkets, we want to make sure that supermarkets deliver value and that consumers are looked after," he said.
Coles and Woolworths make up 67 per cent of the supermarket sector, with the report noting the considerable time it took the next largest chain Aldi to increase its market share — 20 years to get to nine per cent.
In an ASX announcement, Woolworths Group chief executive Amanda Bardwell said the company believes the grocery sector is competitive and customers have more choice than ever.
A Coles spokesperson said the company will examine the report and it supports a diverse supermarket industry that offers choice and competitive prices.
Read more about the class action here.
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