Coles managers have admitted in Federal Court to deliberately raising product prices solely to later claim discounts, exposing systematic deception within Australia's second-largest supermarket chain's famous "Down Down" promotional campaign.
The stunning admissions came during court proceedings where Coles faces allegations from the Australian Competition and Consumer Commission (ACCC) of deliberately misleading customers through manipulated pricing strategies that have been central to the retailer's marketing since 2010.
Key Admissions Under Cross-Examination
Matthew Hankin, a senior Coles manager, conceded during cross-examination that the supermarket giant "worked with a supplier to make a product more expensive while still claiming to have discounted it." The admission represents the first time a Coles executive has publicly acknowledged the pricing manipulation at the heart of the ACCC's case.
"Not doing it to be charitable"
— Matthew Hankin, Coles Manager, during testy exchange with ACCC barrister
The admission came during what court observers described as a heated exchange between Hankin and the ACCC's legal team, highlighting the company's commercial motivations behind pricing decisions that affected millions of Australian consumers.
Pattern of Questionable Practices
A second Coles manager faced similar scrutiny over the company's pet food pricing strategies. Court proceedings revealed concerns about whether "rushing a product onto a 'Down Down' promotion could have broken internal guidelines," according to testimony from the company's pet range manager.
The case specifically examines dog food pricing practices, where managers allegedly circumvented the company's own internal protocols to accelerate products into promotional campaigns that may have misled consumers about genuine savings.
Corporate Defense Amid Damaging Evidence
Despite the damaging admissions, Coles has mounted a fierce defense of its practices. The retail giant insists it "genuinely cares" about its customers, a position maintained even as evidence emerged of the company's aggressive supplier relationships.
Court testimony revealed that Coles has "admitted strong-arming suppliers, threatening to strip products from shelves if they refused to meet the retailer's pricing demands," according to proceedings at the Federal Court in Melbourne. This evidence suggests a pattern of market power abuse that extends beyond customer-facing pricing practices.
The "Down Down" Campaign Under Fire
The ACCC's case targets Coles' signature "Down Down" promotional campaign, which first launched in 2010 and became synonymous with the brand's promise of permanently reduced prices. However, the commission alleges these promotions systematically misled customers about the nature and extent of genuine discounts.
The case represents one of the most significant challenges to Australian retail pricing practices in recent years, with potential implications extending far beyond Coles to the broader supermarket industry's promotional strategies.
Supplier Relationships Under Scrutiny
Evidence presented to the court painted a picture of a company willing to use its market dominance to pressure suppliers into pricing arrangements that supported its promotional strategies. The admission that Coles threatened to remove products from shelves unless suppliers met specific pricing demands reveals the extent of the company's market power.
This evidence is particularly significant given Australia's concentrated supermarket sector, where Coles and rival Woolworths control approximately 70% of the grocery market, giving them substantial leverage over suppliers.
Consumer Impact and Legal Implications
The court proceedings have exposed how pricing manipulation affected everyday Australians who trusted the "Down Down" branding to represent genuine savings. The systematic nature of the alleged deception, involving coordination with suppliers to artificially inflate prices before applying promotional discounts, suggests widespread consumer harm.
Legal experts suggest the case could establish important precedents for corporate accountability in retail pricing, particularly regarding the use of promotional campaigns that may mislead consumers about genuine value.
ACCC's Broader Investigation
The current court battle represents the culmination of an extensive ACCC investigation into supermarket pricing practices. The commission's allegations go to the heart of consumer protection laws designed to prevent misleading and deceptive conduct in commerce.
The regulator's case relies heavily on internal company documents and testimony from senior managers, providing rare insight into the decision-making processes behind major retail promotional campaigns.
Industry-Wide Implications
The Coles case has broader implications for Australia's retail sector, where promotional pricing has become increasingly central to competitive strategies. The outcome could influence how supermarkets structure their promotional campaigns and communicate value propositions to consumers.
Other major retailers are closely watching the proceedings, as adverse findings against Coles could prompt regulatory scrutiny of similar promotional practices across the industry.
What's at Stake
For Coles, the case threatens not only significant financial penalties but also reputational damage to a brand built on trust and value. The "Down Down" campaign has been central to the company's identity for over a decade, making any adverse findings particularly damaging.
For consumers, the case represents a test of whether regulatory authorities can effectively protect against sophisticated pricing manipulation in highly concentrated markets.
The Federal Court proceedings continue, with additional testimony expected from Coles executives and expert witnesses. The final outcome will determine not only Coles' legal liability but also set important precedents for promotional pricing practices across Australian retail.