ACCC legal action against Coles and Woolworths

ACCC legal action against Coles and Woolworths

RMIT experts are available to comment on the impacts of the Australian Competition and Consumer Commission (ACCC) launching legal action against Coles and Woolworths, for allegedly breaching consumer law.

Dr Meg Elkins is Senior Lecturer in Economics, specialising in community wellbeing and dynamic pricing.

“The recent supermarket inquiry has shed light on many Australian families' financial struggles in purchasing basic necessities and groceries. This situation has been further complicated by the recent case against major supermarket chains Coles and Woolworths for allegedly misleading discounting practices.

“The ACCC has uncovered evidence suggesting that these supermarkets may have been inflating prices while creating the illusion of discounts. This revelation underscores the critical need for greater transparency in grocery pricing for consumers.

“In light of these findings, the new mandatory rules for the Food and Grocery Code of Conduct, recommended in the recent Supermarket Inquiry, must be implemented urgently.  These measures are essential to restoring consumer trust and ensuring fair pricing practices in the grocery sector.

“Trust is fundamental in the relationship between consumers and retailers.  The ACCC's case could confirm what many consumers have long suspected about deceptive discount pricing.  It's crucial that we take immediate action to protect Australian families and ensure they can access affordable groceries without fear of being misled.

“There is evidence that supermarkets may have artificially inflated prices while creating an illusion of discounts. The impact of these practices extends beyond individual households. There are worries that such pricing strategies may have contributed to overall inflation, as consumers unknowingly paid higher prices for goods they believed were discounted.”

Dr My Nguyen is a Senior Lecturer in Finance who specialises in market competition, empirical corporate finance, banking, sustainable finance, and digital financial services.

“Coles and Woolworths often engage in price wars, trying to undercut each other to gain market share.  This competitive pressure can sometimes lead to aggressive pricing strategies that may push the boundaries of consumer laws.

“The ACCC's decision highlights the need for transparency and honesty in marketing strategies, especially in the retail sector where consumers rely heavily on advertised discounts.

“This case could set a legal precedent for how promotional pricing is regulated in Australia. If the ACCC's claims are upheld, it might lead to more rigorous enforcement of consumer protection laws in the future.

“Competitors might use this opportunity to highlight their own pricing transparency, potentially gaining market share from consumers who are disillusioned with Woolworths and Coles.  In the long run, ensuring fair pricing practices can contribute to a healthier economy by fostering trust between consumers and businesses, which is essential for sustainable economic growth.”

Dr Angel Zhong is Associate Professor in Finance, specialising in global financial markets, behaviour and trends.

“Australia’s market is often characterized by the dominance of a few large companies across various sectors, such as banking, mining and pharmaceuticals. This concentration of market power can lead to reduced competition, higher prices, and fewer choices for consumers. The recent legal action against Coles and Woolworths by the ACCC highlights the ongoing challenges in ensuring fair competition and protecting consumer interests.

“As market concentration continues to be a concern, it is essential for regulatory bodies to closely monitor and address anti-competitive behaviours.  Strengthening regulations and imposing significant penalties for breaches can deter companies from engaging in practices that harm consumers and the overall market.”

 

General media enquiries: RMIT External Affairs and Media, 0439 704 077 or news@rmit.edu.au

26 September 2024

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26 September 2024

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