On Tuesday, the Australian Competition and Consumer Commission (ACCC)’s case against Woolworths began in Federal Court.
The ACCC alleges the supermarket misled customers by temporarily raising product prices, then advertising a new, discounted price, despite this being higher or the same as the original.
Woolworths has denied the claims, saying: “Those discounts were not ‘illusory’.”
Here’s what you need to know.
Background
Coles and Woolworths control around two-thirds of the supermarket sector.
In the 2024/25 financial year, Woolworths reported a $1.4 billion profit.
In 2024, the ACCC launched separate investigations into Australia’s supermarkets for “misleading customers through discount pricing claims”.
The ACCC’s case against Coles went to court in February. A judgment is yet to be handed down.
Woolworths case
The ACCC claims Woolworths “temporarily increased the prices” (referred to as the ‘was’ price, or WP) of 276 products, before promoting them as reduced.
They allege these new prices (NP) are higher or equal to the originalprice (called the reduced price, or RP).
The consumer watchdog claims these misleading prices were promoted with the ‘Prices Dropped’ scheme. Woolworths discontinued this promotion in late 2024.
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Tim Tams NP: 22% higher than RP
Stayfree Pads NP: 7% higher than RP
Oreos NP: 29% higher than RP
Trial
On day one of the trial, lawyers for the ACCC began by arguing the ‘Prices Dropped’ labels drew consumers in by advertising the new prices as lower and stable, rather than a temporary special.
The legal team for Woolworths saidthe discounts were “genuine”.
The ACCC is seeking monetary penalties from the supermarket.
Under Australian Consumer Law, the maximum penalty for a breach is $50 million.
What’s next?
The trial will run for two weeks, with the final hearing planned for 1 May.
The court is yet to deliver a verdict in the ACCC’s February case against Coles.
From 1 July, the Government’s new laws banning price gouging will also come into place.
This means large retailers (such as Coles and Woolworths) will be prohibited from charging excessiveprices, in comparison to supply costs and a reasonable margin.
