SYDNEY — An Australian federal court ruled Wednesday that supermarket giant Coles Group misled consumers by advertising hundreds of products as being on sale when their prices had in fact been temporarily inflated beforehand, a practice the presiding judge described as systematically deceptive and one that cheated shoppers out of tens of millions of dollars over a period of nearly four years, in a landmark consumer protection decision with implications for the entire Australian retail industry.
Justice Patricia Halliwell of the Federal Court of Australia found that Coles had breached the Australian Consumer Law on at least 266 separate product lines between mid-2021 and early 2025. In each case identified by the court, the company raised the regular shelf price of an item for a brief window — sometimes as short as 28 days — before placing it into a promotional campaign badged as “Dropped and Locked” or “Better Value,” creating the appearance of a meaningful price reduction where none materially existed relative to what consumers had been paying weeks earlier.
The ruling lands as a significant legal and reputational blow to one of Australia’s two dominant supermarket chains and comes in the middle of a prolonged political reckoning over grocery pricing practices across the country. A parliamentary inquiry into supermarket competition concluded last year with findings that major chains had used their outsized market power to squeeze supplier margins and mislead shoppers on pricing, and the federal government subsequently granted the Australian Competition and Consumer Commission substantially expanded investigative and enforcement powers to address retail pricing conduct.
“Consumers rely on promotional pricing to make informed decisions about where and how they spend limited household budgets,” Justice Halliwell wrote in a 214-page judgment handed down Wednesday morning. “When a retailer manufactures the appearance of a discount by engineering an artificial elevation in the reference price, it exploits the trust that shoppers place in the pricing system. The court finds that this conduct was not accidental, nor was it confined to isolated commercial decisions. It was embedded in the promotional planning processes of Coles at multiple organizational levels over an extended period.”
The ACCC, which brought the civil enforcement case following a 14-month investigation, said the affected products spanned a wide range of everyday categories including breakfast cereals, cooking oils, pasta, dairy products, personal care items, and household cleaning supplies. Investigators found that in the most egregious cases, a product’s reference price was raised by as much as 40 percent in the weeks before the promotional window opened, meaning that the final “sale” price was still materially higher than what shoppers had routinely paid for the same item just six weeks earlier.
Coles, which operates more than 850 supermarkets across Australia and reported revenues of A$44.6 billion in its most recent fiscal year, said in a statement to the Australian Securities Exchange that it was deeply disappointed by the ruling and was reviewing its legal options, including the possibility of an appeal to the Full Federal Court. The company said it had already undertaken a comprehensive overhaul of its promotional pricing systems and retrained all staff with responsibility for setting the reference prices that underpin discount campaigns. Shares in Coles fell 4.2 percent in Sydney trading following the judgment, erasing approximately A$1.3 billion in market value by midday.
Consumer advocacy organizations called the decision a landmark moment in Australian retail accountability. “This is not a technicality,” said Jennifer Okafor, chief executive of the Australian Consumers Federation. “This is a federal court affirming, on the evidence, that Australians were systematically misled at the checkout — week after week, on products they buy every single time they shop — by one of the two companies that dominate the food retail market.” Okafor said her organization would push the government to introduce mandatory pricing transparency legislation requiring retailers to publish rolling 90-day price histories for every product placed into a promotional campaign.
A separate penalty hearing has been scheduled for August, at which point Justice Halliwell will determine the financial sanction Coles must pay to the Commonwealth. The ACCC indicated it intends to seek a penalty of no less than A$80 million, citing the deliberate, prolonged, and widespread nature of the conduct. Legal analysts and former enforcement officials said a fine exceeding A$100 million was plausible given the scale of the violations and the trajectory of recent consumer law penalties in Australia. Whatever the final figure, the case is expected to prompt immediate internal audits of discount pricing mechanics at rival supermarket chains across the country.