ACCC v Coles: When ‘Was/Now’ pricing crosses the line

The Federal Court’s recent judgment in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd provides a detailed, fact‑sensitive framework for assessing dual‑price promotions. The decision is important for retailers and suppliers because it explains how courts will evaluate whether a “Was” price supports a consumer’s reasonable inference that a later “Now” price is a genuine discount.

Background and the promotional mechanics

At issue was Coles’ long‑running ‘Down Down’ promotion, which used distinctive red/white ‘Down Down’ tickets and online tiles to advertise promotional prices.

The ACCC alleged that Coles had temporarily increased prices (a “price spike”) and then advertised a subsequent promotional price as a discount from that temporarily higher ‘Was’ price, which thereby misled consumers about the genuineness of the discount. For the purpose of the trial, the Court considered an agreed list of 12 sample products, with two products placed on the Down Down program twice, yielding 14 pricing tickets for consideration.

The Court examined both in‑store shelf tickets (the physical labels displayed beneath products) and online product tiles. The in‑store tickets used a red/white colour scheme and typically displayed a prominent ‘Now’ (Down Down) price with a smaller ‘Was’ price and a date (for example, “Was $6.50 June 2022”). The online tiles used comparable visual cues to convey the same comparative price message.

What the Court found

The Court concluded that the ‘Down Down’ tickets for the sample products did convey to ordinary consumers that the promotional price was a genuine reduction from the stated ‘Was’ price. As the judgment states:

“I have concluded that the Down Down tickets for the sample products conveyed a representation to ordinary consumers that Coles had reduced the price of the product from the ‘Was’ price and, implicitly, that the reduction in price involved a real or genuine discount.”

On the facts, the Court found most of the sample tickets misleading and thus contraventions of sections 18(1) (misleading or deceptive conduct) and 29(1)(i) (false or misleading representations with respect to price) of the Australian Consumer Law:

“I have concluded that 13 of the 14 Down Down tickets that were the subject of consideration in the joint liability trial were misleading because the relevant products were not sold at the ‘Was’ price stated on the ticket for a reasonable period and, as a consequence, the discount represented on the ticket was not genuine.”

The Court found that the Nature’s Gift dog food product ticket was not misleading because it did not include a previous ‘Was’ price on the Down Down ticket.  In the context of the allegations made by the ACCC, this is an important nuance.

The Court’s approach to the legal question

The Court considered what the ordinary consumer would understand the ticket to mean in context. The Court assessed the representation conveyed by the ticket, not only the literal words.

The Court noted that the ‘Down Down’ tickets used a consistent visual format that consumers recognised. That recognition shaped the ordinary consumer’s inference about the nature of the discount.

Where a ticket included a date alongside the ‘Was’ price, that contextual detail informed the consumer’s understanding and was relevant to the Court’s assessment. The Court weighed a range of factors, including:

• the commercial circumstances that produced the ‘Was’ price (for example, supplier cost increases and negotiated list price changes);
• the level of the ‘Was’ price relative to prior prices;
• the duration for which the product was sold at the ‘Was’ price; and
• the volume of sales at that price.

Of particular relevance was Coles’ internal compliance policies, referred to as ‘guardrails’.  Of note:

• Under older guardrails (introduced 2019), a product taken off Down Down due to a cost price increase could not return for nine months.
• In January 2022, Coles updated the guardrails imposing a 12-week ‘price establishment period’.
• In March 2022, Coles wound back the guardrails to just four weeks, in response to competitive pressure from Woolworths.

While the Court accepted that many of Coles’ price increases followed supplier cost price adjustments and that those increases were commercially justifiable, even commercially justified price increases can give rise to misleading comparative claims if the prior price was in effect only briefly and the ticket implies a longer‑standing prior price. Having adopted the standard itself, Coles knew a 12-week period was necessary but then departed from it. The Court characterised this as a “race to the bottom” in terms of consumer law compliance.

The Court stated that:

“If Coles had offered the products for sale at the ‘Was’ price for twelve weeks, the Down Down tickets would not have been misleading”.

Learnings for retailers and suppliers

• No rigid temporal rule: Although the Court observed that, on the evidence in this industry context, a 12‑week period would have been sufficient for an ordinary consumer to regard a prior price as a genuine regular price, the Court emphasised that this was an evaluative conclusion tied to the facts of the case. The judgment does not create a universal 12‑week rule that applies in all contexts. While a period of 12 weeks may have heightened relevance in the grocery sector, retailers in other sectors will likely face different evaluative standards.
• ACCC guidance: The ACCC’s published guidance on comparative pricing and ‘was/now’ claims remains a practical compliance benchmark. It emphasises that prior prices used for comparison must be genuine and supportable. Retailers should align ticketing practice with that guidance.
• Short‑term spikes: Be cautious about using a short‑lived higher price as the basis for a subsequent ‘discount’ claim. If a higher price was in effect only briefly, it may not be appropriate to present that price as the comparator.
• Policy clarity: Adopt clear, consistently applied internal rules for when a prior price may be used as a comparative reference for promotions. Ensure those rules are grounded in practical reality and anchored to the fundamental question: Would an ordinary consumer regard the prior price as a genuine regular price? While such policies will not completely determinative, they can serve as powerful evidence of what a reasonable period would be. As was seen in the Coles decision, internal policies can serve as admissions of what the business itself regarded as the minimum acceptable standard. Departing from those policies, even under competitive pressure, creates significant evidentiary risk.
• Ticket design and wording: Ensure that the visual presentation and wording of comparative tickets do not reasonably convey a misleading history of pricing. Dates, ‘Was’ labels and the prominence of comparative information are all relevant.
• Record keeping: Maintain contemporaneous records showing how and why shelf prices changed (supplier cost price alteration requests, promotional funding, internal approvals, sales volumes and timing). Those records are likely to be central evidence in any enforcement or litigation scenario.
• Online/in‑store consistency: Ensure online tiles and in‑store tickets convey consistent comparative information.

What is still to come?

• Possible appeal: Coles has 28 days from judgment to appeal to the Full Court of the Federal Court. If there were to be an appeal, the judgment’s practical authority could be affected by appellate review.
• Penalties: Should the liability judgment stand, there will then be a hearing on the question of penalties. The conduct in question occurred between February 2022 and May 2023, which means the maximum penalty may be less than if the conduct were to occur now. Nevertheless, the ACCC has publicly stated it will seek a “substantial penalty” that cannot be dismissed as a “cost of doing business”.
• Class action: A parallel class action (Demery v Coles Supermarkets Australia Pty Ltd) was heard jointly with the ACCC proceeding, with the liability findings applying directly to the class action. The class action seeks compensation and refunds for a class of affected consumers, brought by Gerard Malouf & Partners on behalf of affected consumers, represents an estimated 10 million shoppers.
• ACCC v Woolworths: The ACCC brought separate but similar proceedings against Woolworths, also before Justice O’Bryan. That matter has been heard and awaits judgment. That case involves similar themes but will turn on its own factual matrix. Differences in internal policies, supplier negotiations, the duration of prior prices and ticket presentation may mean a difference in outcomes and learnings.
• Broader regulatory context: Earlier in 2026, the Federal Government released a consultation paper with respect to proposals to require supermarkets to publish prices in-store, require large supermarkets to publish prices online, enable web-scraping technologies of large supermarkets’ website (e.g. for price comparison and research), establish minimum information requirements with respect to discount price promotions, and oblige very large supermarkets to provide members with periodic loyalty program information disclosure summaries. This comes in response to the ACCC’s report, released in March 2025, into its inquiry into supermarket pricing and competition. The Government may therefore legislate for large supermarkets, where there is a discount promotion, to provide consumers with certain information about the discount and how it was determined. This judgement of the Federal Court will likely have a material effect on Government’s thinking with respect to implementing this policy proposal.

How Gadens can help

The judgment reinforces that dual-price promotions are permissible but must be factually supported and presented in a way that an ordinary consumer would not find misleading. Gadens can assist businesses looking to enhance compliance in their merchandising and pricing operations, including:

• Auditing ticketing and promotional practices.
• Drafting or revising internal pricing and promotional policies.
• Preparing documentation protocols for supplier negotiations and price changes to reduce enforcement risk.

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Authored by: 

Adam Walker, Partner