The Federal Court has confirmed what many in the commercial law world suspected: Coles’ “Down Down” pricing campaign misled Australian consumers. In a landmark ruling handed down on 14 May 2026, the Court found that Coles engaged in misleading or deceptive conduct under the Australian Consumer Law by manufacturing artificial “was” prices to make subsequent promotional discounts appear larger than they genuinely were.
This is not just a story about a supermarket’s marketing tactics. It is a defining moment in Australian Consumer Law enforcement — and a direct warning to every business in Australia that uses “was/now” pricing, promotional discounts, or comparative price claims.
What the Court Found
The facts, as established at trial, tell a clear story. Coles identified products it planned to enrol in its “Down Down” promotional program. Before the promotion launched, it raised the prices of those products — sometimes for as little as seven days — to create an artificially inflated “was” price. The product then went into “Down Down” at a price lower than the spike price, but higher than the genuine pre-spike price customers had been paying for months or years before.
Take the example of dog food: a product regularly priced at $4.00 was briefly spiked to $6.00, then enrolled in “Down Down” at $4.50 — with a ticket displaying “was $6.00.” Consumers reasonably understood they were getting a significant discount from a genuine regular price. In reality, they were paying more than they had before the promotion started.
The ACCC characterised these discounts as “utterly misleading” and “illusory.” The Court agreed.
Coles attempted to defend the practice by arguing that supplier cost increases justified the price changes. The Court rejected this argument. The supplier cost justification did not explain why Coles had already planned to later place the products on “Down Down” at the time it implemented the price spike — or why the spike period was so brief. The inescapable inference was that the spikes were engineered to create the appearance of a better deal than actually existed.
The parallel proceedings against Woolworths — ACCC v Woolworths — relating to its “Prices Dropped” campaign — remain before the Federal Court, with judgment pending. The Coles ruling sends a clear signal about where the law stands on this type of conduct.
The Legal Framework: ACL Sections 18 and 29
The ACCC brought its case under two key provisions of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)):
- Section 18 ACL — Misleading or deceptive conduct: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. Critically, there is no requirement to prove intent. The test is purely objective: would a reasonable person in the position of the consumer be misled?
- Section 29 ACL — False representations about price: A person must not make a false or misleading representation about the price of goods or services. This provision directly targets dishonest price marketing — including artificially inflated “was” prices.
The ACCC’s own guidelines on pricing and consumer law are instructive. A genuine “was” price — the reference price against which a promotional discount is calculated — must be the price at which the goods were genuinely offered to the public for a reasonable period before the promotion began. A price spike engineered for the sole purpose of creating a higher reference baseline does not qualify.
The critical concept here is the “reference price” problem. If a business inflates its baseline price to make the discount look bigger, it is not providing consumers with accurate information about what they are saving. The law does not require bad faith or deceptive intent — it only requires that the conduct, objectively assessed, would mislead a reasonable consumer.
What This Means for Australian Businesses
The Coles ruling is not a supermarket problem. It is a business problem — and it applies across virtually every sector of the Australian economy.
Any business that uses comparative pricing — “was/now” labels, “save X%” claims, “RRP” comparisons, or promotional discount campaigns — needs to understand the rules that this judgment has just reinforced:
- “Was/now” pricing: The “was” price must be the genuine, sustained regular price at which the product was offered for a reasonable period before the promotion. A brief pre-promotional spike does not create a legitimate reference price.
- “Save X%” claims: The percentage saving must be calculated from a real, regular price — not a manufactured baseline. If the “was” price is artificial, the “save X%” claim is false.
- “RRP” comparisons: Comparing to a manufacturer’s recommended retail price (RRP) is generally safer, but can still mislead if the product has never actually been sold at that price in the market.
- Online retailers: Dynamic pricing and algorithmic promotion planning make it particularly easy — and particularly dangerous — to inadvertently engineer reference prices that do not reflect genuine market pricing.
- Fashion and apparel retailers: Perpetual “sale” pricing, where items are rarely (if ever) sold at the full “was” price, attracts exactly the same scrutiny under sections 18 and 29.
- Car dealers, real estate agents, and service businesses: Any promotional pricing claim is subject to the ACL framework. The standard is consistent across industries.
The legal test is objective. Intent does not matter. Whether your pricing system generated the reference price automatically or a category manager chose it manually, if a reasonable consumer would be misled, you have a problem.
The Penalties
The financial consequences of ACL contraventions at this scale are enormous. Under the Competition and Consumer Act 2010 (Cth), civil penalties for contraventions by bodies corporate are the greatest of:
- $50 million per contravention;
- Three times the value of the benefit obtained; or
- 30% of the body corporate’s adjusted turnover during the breach period.
For Coles, with the ACCC identifying hundreds of affected products across a sustained period, the potential penalty exposure is enormous. The penalty phase is yet to be determined — but the ACCC has made clear that supermarket pricing practices are a top enforcement priority in 2025–26, and it will be pressing for penalties commensurate with the scale and deliberateness of the conduct.
This is a company with billions of dollars in annual revenue. The 30% of turnover metric alone would produce a headline-grabbing figure. While courts ultimately assess penalties on a range of factors — including cooperation, contrition, and proportionality — the structural penalty framework makes this a billion-dollar exposure territory.
For smaller businesses, the calculus is different in quantum but identical in legal risk. A $50 million maximum per contravention is catastrophic at any scale. And the ACCC does not limit its enforcement action to the largest players.
Practical Compliance Guidance
If your business uses promotional pricing — in any form — now is the time to audit your practices. Here is what you should do:
- Audit your reference prices. For every “was/now” promotion currently active, ask: what is the “was” price, how long was the product genuinely sold at that price, and was that period substantial enough to constitute a genuine regular price?
- Document your pricing methodology. You need to be able to demonstrate, if challenged, that your reference prices reflect genuine, sustained market pricing — not engineered spikes. Keep records.
- Review your pre-promotion pricing timeline. The ACCC will look at how long a product was sold at the reference price before the promotion, and whether a price spike preceded the promotional price. Even a brief and apparently justified spike can undermine the legitimacy of the reference price if it was planned in connection with the promotion.
- Apply particular scrutiny to systematic promotional programs. If you run a standing promotional program (like “Down Down” or “Prices Dropped”), the ACCC’s approach in these cases shows it will examine the entire system — not just individual products.
- Get legal advice before launching major campaigns. A promotional pricing campaign that runs for months across hundreds of products can generate a penalty exposure that dwarfs the revenue it generates. Pre-campaign legal review is cheap insurance.
- Act quickly if you receive an ACCC inquiry or notice. The ACCC has broad investigative powers. Early engagement, cooperation, and remediation can significantly affect penalty outcomes.
How Boss Lawyers Can Help
We act for businesses on both sides of Australian Consumer Law disputes — businesses facing ACCC investigations or misleading conduct claims, and parties who have been misled by competitors, suppliers, or counterparties.
Commercial litigation is at the core of what we do. If your business has received a notice from the ACCC, is facing a misleading conduct claim from a competitor or consumer, or needs to understand its ACL exposure before a major promotional campaign, get advice early. The earlier you act, the more options you have.
Contact Boss Lawyers on 1300 267 711 or through our website to speak with our team.
Frequently Asked Questions
What is misleading conduct under the Australian Consumer Law?
Misleading conduct under section 18 of the Australian Consumer Law (ACL) occurs when a business engages in conduct — including representations, advertisements, or pricing practices — that is misleading or deceptive, or likely to mislead or deceive, a reasonable person. The test is objective: it does not matter whether the business intended to mislead anyone. If a reasonable consumer would be misled by the conduct, the ACL is engaged.
Can a business be liable for misleading pricing even without intending to mislead?
Yes. Section 18 of the ACL does not require any intention to mislead. A business can be held liable for misleading pricing even where the conduct resulted from automated systems, negligence, or a mistaken belief that the pricing was legitimate. The question is simply whether a reasonable consumer was misled — not whether the business meant to mislead them.
What is a genuine “was” price for the purposes of a promotional discount?
A genuine “was” price is the price at which goods were actually offered to the public for a substantial and genuine period before the promotion commenced. The ACCC’s guidance indicates the reference price must reflect a real, sustained regular price — not a price that was briefly inflated immediately before the promotion for the purpose of making the promotional price appear more attractive. The key questions are: was the price genuine? Was it maintained for a reasonable period? And was the promotion planned in connection with the price that preceded it?
What penalties apply for misleading pricing under the ACL?
Civil penalties for ACL contraventions by companies are the greater of: (a) $50 million per contravention; (b) three times the value of the benefit obtained from the contravention; or (c) 30% of the company’s adjusted annual turnover during the breach period. Where hundreds of products are involved across a sustained period, multiple contraventions can be alleged — making aggregate penalty exposure very significant. Courts may also award injunctions, corrective advertising orders, and compensatory orders in favour of affected consumers.
If you are involved in a commercial dispute in Queensland, our commercial litigation lawyers Brisbane can advise you on the best strategy — whether that is negotiation, mediation, or court proceedings. Contact Boss Lawyers on 1300 267 711 for an initial discussion.
Related reading:
- Commercial Dispute Resolution in Brisbane: Litigation, Mediation & Arbitration
- What Is a Breach of Fiduciary Duty and Can You Sue a Director?
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This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
Mark Harley | Principal Solicitor | Boss Lawyers | 17+ years experience | 3,000+ clients served
