Coles and Woolworths are now embroiled in class action lawsuits over claims they misled consumers about product pricing. Sydney-based law firm GMP Law initiated the lawsuit on Thursday, just months after the Australian Competition and Consumer Commission (ACCC) took similar legal action.
Consumer Rights and Transparency at the Centre
GMP Law’s chairman, Gerard Malouf, stated that the class action aims to protect consumer rights and ensure retail transparency across Australia. “We believe this class action is an essential move toward safeguarding consumer rights and demanding transparency in retail practices Australia-wide,” Malouf told NewsWire.
The class action reflects the allegations previously made by the ACCC. The ACCC accused Coles and Woolworths of misleading customers by claiming to lower prices while, in reality, only offering marginal discounts after temporary price hikes.
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Refunds for Consumers
GMP Law announced that participating consumers might qualify for refunds between $200 and $1300, depending on their shopping habits and purchases. The firm is proceeding on a no-win-no-fee basis to make it easier for affected shoppers to join.
Details of Alleged Misconduct
According to GMP Law, Coles allegedly engaged in misleading advertising for discounts on 245 supermarket items. Woolworths, in turn, faced similar accusations regarding 266 products. Both chains are accused of increasing prices by at least 15 per cent over a brief period before presenting promotions that implied price reductions.
However, instead of lowering prices to their original levels, the supermarkets allegedly offered minimal discounts, misleading consumers into believing they were saving more.
Coles and Woolworths Respond
Coles has yet to receive formal notification of the class action, a company spokesperson confirmed. Woolworths declined to comment on the legal move.
In October, Coles CEO Leah Weckert defended the company against the ACCC’s claims. She said Coles strives to provide genuine savings and prioritises customer trust, especially during tough economic times.
“We believe that really goes to the heart of customer trust, and it’s something we do take very seriously at Coles, especially at the moment when we know that cost of living challenges are really facing a lot of households,” Weckert said.
Potential Penalties Looming
If Coles and Woolworths fail to defend the allegations, they face significant financial penalties. The ACCC is seeking penalties that could reach $50 million per breach of consumer law. Other potential penalties include fines amounting to three times the benefit obtained from the misleading practices or 30 per cent of corporate turnover during the breach period.
Background: ACCC’s Initial Legal Action
In September, the ACCC initiated legal proceedings against Coles and Woolworths over similar pricing allegations. The competition watchdog accused both supermarket chains of deceptive conduct involving price promotions that suggested greater savings than consumers actually received.
The ACCC’s legal filing claimed Coles and Woolworths raised product prices by at least 15 per cent over a short period before promoting them at slightly reduced prices. This tactic gave consumers the impression of significant savings, even though the new prices remained higher than the original ones.
Consumer Reactions and Broader Implications
The class action by GMP Law aims to amplify the ACCC’s efforts and create broader awareness of retail pricing practices. Consumers involved in the lawsuit may receive substantial refunds based on their shopping patterns. The lawsuit highlights the growing scrutiny of supermarket giants in Australia and raises questions about the transparency of retail marketing strategies.
Malouf emphasised the importance of holding retailers accountable to ensure fair treatment for consumers. “Transparency is critical in maintaining trust between consumers and retailers,” he said.
Supermarkets Point to Rising Costs
Both Coles and Woolworths have attributed rising grocery prices to increased supplier costs. In response to prior scrutiny, they pointed fingers at multinational suppliers for contributing to higher product prices.
Next Steps for Consumers
Consumers interested in joining the class action can reach out to GMP Law for more information. The class action seeks to provide refunds and challenge misleading pricing practices to prevent future issues.
Australians concerned about the accuracy of retail pricing can find hope in these legal actions aimed at fostering transparency and accountability. The outcome of these lawsuits could set a precedent for consumer rights protection in Australia’s retail sector.
