The Australian Competition and Consumer Commission launched action against Woolworths in 2024, claiming the supermarket giant broke consumer law by hiking prices on everyday items for brief periods before marking them down as part of its “Prices Dropped” promotion.
The watchdog’s argument is straightforward. Products were sold at regular long-term prices for at least six months, then subject to price rises of at least 15 per cent for short periods, before being placed in the “Prices Dropped” promotion at prices lower than during the spike, but higher than, or the same as, the original price.
In plain terms: the discounts were fake.
“We allege these misleading claims about illusory discounts diminished the ability of consumers to make informed choices about what products to buy, and where,” ACCC chair Gina Cass-Gottlieb said.
The Products at the Centre of the Woolworths Fake Discount Case
The watchdog alleges the conduct involved 266 products for Woolworths across 20 months, between late 2021 and mid-2023, impacting tens of millions of sales.
For the court hearing, that list has been trimmed. The product list was pared down to 12 agreed items to be scrutinised in court, including a Tim Tams Family pack, Carman’s classic fruit and nut muesli bars, and Sakata rice crackers.
Other items on the agreed list include Oreos and dog bones.
An audit of 276 products featured in the campaign reportedly found that 265 items, or 96 per cent, were sold at higher prices during the promotion than in the weeks preceding it, with average price increases ranging from 3.1 per cent to 18.7 per cent.
The Tim Tam case is the clearest example. The ACCC asserted that a 250g pack increased from $3.50 to $3.80 during the promotional window despite carrying the “Price Dropped” label.
Woolworths Heads to Court After Coles Goes First
Woolworths will defend itself this week against claims of fake discounting in a bombshell court case brought by the competition regulator. The ACCC launched cases against both Woolworths and Coles, claiming the supermarkets’ marketing strategies deliberately misled shoppers.
Woolworths, Australia’s biggest supermarket, will have its turn in court on Tuesday after Coles made its defence against the allegations back in February. The final judgment is reserved until Woolworths makes its case.
Inside the Federal Court in Sydney, the case is expected to stretch over two weeks, with senior Woolworths managers called to explain how pricing decisions were made on a tightly scrutinised list of 12 products, narrowed down from a much larger pool flagged by regulators.
The ACCC will probe internal emails and systems behind Woolworths’ promotional pricing decisions.
What Woolworths Says
The supermarket is not taking this lying down.
“We fundamentally disagree with the claims made. At no stage did we mislead or deceive customers,” a Woolworths spokesperson said.
Woolworths is set to point to a period of “extraordinary inflation” following Covid as the reason why it had to hike prices on groceries. “We were acutely aware that customers expected Woolworths to provide value wherever possible,” a spokesperson said.
Woolworths also maintains that the reference price was based on national average data from independent retail tracking firm IRI, not its own historical pricing, and argues that the campaign complied with Australian Consumer Law requirements for comparative advertising.
What’s at Stake: Penalties and Community Service Orders
The penalties could be severe.
For contraventions from 10 November 2022, the maximum penalty is up to $50 million if the court can determine the value of the reasonably attributable benefit obtained, three times that value, or if the court cannot determine the value, 30 per cent of the corporation’s adjusted turnover during the breach period.
Beyond fines, the ACCC wants more. It is also seeking community service orders that Woolworths must fund a registered charity to deliver meals to Australians in need, in addition to any pre-existing charitable meal delivery programs.
Price history of Oreos Family Pack, illustrating the alleged spike-and-drop pattern at the centre of the ACCC’s case. [Beef Central]
Why This Case Goes Beyond Tim Tams
This legal clash is not happening in isolation. It follows years of growing frustration in Australia over supermarket pricing power, with both Woolworths and rival Coles facing political scrutiny, parliamentary inquiries, and accusations that profits have come at the expense of households and suppliers.
Consumer advocacy group CHOICE reported in March 2026 that 68 per cent of Australians believe supermarkets engage in misleading pricing tactics, up from 52 per cent in 2022.
Woolworths and Coles together control a sizeable chunk of Australia’s grocery market. A finding that their discount campaigns were deliberately deceptive would carry consequences well beyond this case.
Woolworths has already been ranked among Australia’s most distrusted brands in recent consumer surveys, a striking reversal from the goodwill both supermarkets built during the Covid pandemic.
The legal action also runs parallel to a separate class action filed against both chains by law firm GMP Law, which claims affected shoppers could be eligible for refunds of between $200 and $1,300 depending on their purchasing history.
Analyst Jonathan Mott from Morgan Stanley described the ACCC action as a “material non-financial risk” to Woolworths’ earnings stability, particularly if the court finds the conduct was systematic. “This isn’t just about biscuits,” Mott said. “It’s about whether Australia’s largest retailer can be trusted to communicate prices accurately in an inflationary environment where every cent matters to households.” Archyde
The ASX has already felt the pressure. When the ACCC first launched legal proceedings against both chains, Woolworths and Coles shares took a sharp hit as investors priced in regulatory risk.
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FAQ
Q: What is the Woolworths fake discount case about?
A: The ACCC alleges Woolworths raised prices on 266 products by at least 15 per cent over short periods before placing them in its “Prices Dropped” promotion. The watchdog says the so-called discounts were illusory, with many products priced at the same or higher than their original shelf price.
Q: When does the Woolworths court case start?
A: Woolworths began presenting its defence in the Federal Court in Sydney on Tuesday, 22 April 2026. The hearing is expected to run for approximately two weeks.
Q: What products are involved in the case?
A: The court is examining 12 agreed products, including a Tim Tams Family pack, Sakata rice crackers, Carman’s classic fruit and nut muesli bars, Oreos, and dog bones.
Q: What penalties could Woolworths face?
A: Woolworths faces fines of up to $50 million per breach, or up to 30 per cent of adjusted annual turnover for the relevant period. The ACCC is also seeking community service orders requiring Woolworths to fund a charity to deliver meals to Australians in need.
Q: Has Coles faced the same allegations?
A: Yes. The ACCC launched separate but parallel proceedings against Coles over its “Down Down” promotion in 2024. Coles made its defence in February 2026. Judgment for both cases will be reserved until Woolworths completes its case.
Did Woolworths admit to any wrongdoing?
A: No. Woolworths says it never misled customers and that pricing changes reflected extraordinary inflation following the Covid-19 pandemic.
Disclaimer: This article is for informational purposes only. It does not constitute legal or financial advice. Readers should seek independent advice before making any decisions based on the information contained herein.
Source:
- https://www.sbs.com.au/news/article/woolworths-to-face-court-over-allegedly-fake-discounts-on-tim-tams/vkp7yjp4i
- https://www.beefcentral.com/trade/accc-tackles-coles-woolworths-in-federal-court-over-discount-claims/
