It’s hard to feel sorry for them, but the two major supermarket chains are facing another public lashing that could cost them millions, if not billions.
Two Australian law firms are in the initial stages of investigating a class action suit against Coles and Woolworths over pricing policies, and every Australian who has shopped at the chains may be eligible.
GMP Law is gathering evidence and assessing the viability of a class action against Coles specifically, while Carter Capner Law is in the process of investigating if there are grounds for legal action against both supermarkets.
Deceptive pricing
“Early estimates suggest that households could claim between $2000 and $5000, depending on the amount spent and the impact of the deceptive pricing,” Carter Capner Law director Peter Carter told YahooNews.
Apparently, the law firm has been dealing with an ‘avalanche’ of calls from outraged customers.
Both firms are basing their claims on evidence from the Australian Competition and Consumer Commission (ACCC) inquiry into the supermarkets. While the inquiry is covering several topics including supplier contracts and market share, the class actions are specifically against pricing tactics, particularly ‘special’ prices. The two firms claim these tactics breached Australian consumer law.
The ACCC has launched its own legal action against the supermarkets over the issue.
“The evidence the ACCC has collected would be useful, but the claim relies on their breaches of the Australian Consumer Law sections 18 (misleading/deceptive conduct), 20, 21 (unconscionable conduct) and 29 (misleading representation re price of goods),” Mr Carter said.
Inundated with complaints
Mr Carter said that initially the firm had no plan for a class action, but after commentating in the media about the ACCC inquiry they were inundated with complaints from the public.
GMP Law said they were basing their potential case on:
- Misleading and deceptive conduct: Coles is accused of promoting products with ‘Prices Dropped’ and ‘Down Down’ labels that were potentially false or misleading.
- Breach of Australian Consumer Law: the lawsuit alleged that Coles engaged in conduct that contravenes the Australian Consumer Law by making false or misleading representations about price.
- Financial harm to consumers: there are claims that consumers suffered financial losses by paying more for products than they would have if the pricing had been accurately presented.
- Failure to provide genuine discounts: Coles is accused of not offering real price reductions despite advertising products as discounted.
GMP Law said consumers might be eligible if they shopped at Coles in Australia, instore or online, between February 2022 and May 2023 and purchased any products marked as ‘Priced Dropped’ or ‘Down Down’.
“Consumers have the right to receive honest and transparent information about the products they purchase,” GMP Law chairman Gerard Malouf told YahooNews. “This investigation is an important step towards protecting those rights and ensuring that businesses adhere to fair trading practices.”
Alleged price manipulation
GMP Law’s special counsel, Diane Chapman, explained to Yahoo that there were three ways the firm was 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.”
The ACCC legal action is based on supermarket tactics to offer an item on special, and when it was returned to full price, the final price was higher than the original purchase price, a tactic it described as offering an ‘illusionary’ discount.
The 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.
“We allege these misleading claims about illusory discounts diminished the ability of consumers to make informed choices about what products to buy, and where,” the ACCC said in a statement announcing the legal action.
To join the GMP action visit here. To join the Carter Capner Law action, visit here.
Would you join the class actions? Why not share your opinion in the comments section below?
Also read: Pointless laws and milk wars: will these moves bring grocery prices down?
I might join, but I would think any such cases would drag on for a decade or more before the courts while the lawyers had a field day.