Executive Summary
The Federal Court’s decision in ACCC v Coles has generated significant discussion across the retail industry.
Many retailers have asked whether the decision means a product must be sold at a higher price for at least 12 weeks before a price reduction can be advertised.
The short answer is no.
The Court did not create a mandatory 12-week rule. It reinforced the long-standing principle that customers must receive the genuine saving represented by a price comparison.
Whether a previous price was offered for a reasonable period depends on the retailer, the product and the circumstances of the promotion.
Why is everyone talking about the Coles decision?
The case concerned Coles’ “Down Down” price tickets. For most products, the tickets displayed a “Was” price and a lower “Down Down” price.
The products had generally been sold at the “Was” price for approximately four weeks before the promotion.
The Court found that 13 of the 14 sample price tickets gave customers the impression that they were receiving a genuine discount from the product’s previous ordinary selling price.
In the particular circumstances of Coles’ pricing model, that impression was misleading because the products had not been offered at the “Was” price for a reasonable period before the promotion.
The most important lesson:
the Court did not create a 12-week rule
Myth: Every retailer must now use a 12-week price-establishment period.
Reality: The Court assessed Coles’ particular circumstances. The legal question remains whether the comparison price was the genuine previous selling price and whether it was offered for a reasonable period.
The reference to 12 weeks arose from factors specific to Coles, including:
the relatively stable pricing of supermarket products;
the way the “Down Down” program operated; and
Coles’ own internal pricing policies.
The decision should not be read as prescribing a fixed period for every retailer or every product.
What did the Court consider?
The Court did not apply a simple time test. It considered several practical factors, including:
why the higher price had been introduced;
how long the products were sold at that price;
whether products were sold in genuine commercial volumes;
the products’ normal pricing patterns; and
what ordinary customers would understand from the “Was/Now” comparison.
Importantly, the Court accepted that Coles’ higher prices were commercially justified following supplier cost increases and were not artificially inflated.
The issue was whether, viewed as a whole, the advertised discount represented a genuine saving from the product’s ordinary previous selling price.
Watchdog tip: Focus less on counting weeks and more on whether you can confidently explain why the comparison price represents the product’s genuine previous selling price.
What does this mean for retailers?
The Coles decision reinforces the importance of considering the overall impression created by a price comparison.
Customers will generally assume that a “Was/Now”, “Save $” or strike-through price represents a real saving. Before launching a campaign, retailers should ask whether that expectation is justified.
Five practical lessons from the Coles decision
Review pricing history
Understand how products were priced before the promotion.
Keep supporting evidence
Retain pricing records and sales history that support the comparison prices used.
Do not rely on an arbitrary timeframe
There is no universal price-establishment period. The circumstances of each promotion matter.
Review pricing governance
Ensure automated pricing systems and promotional approval processes are properly supervised.
Think like a customer
Consider the message an ordinary customer is likely to take from the advertisement.
Other ACCC cases point in the same direction
The Coles decision sits alongside earlier ACCC enforcement involving Emma Sleep, Dell Australia, Bloomex, 4WD Supacentre and other businesses.
Although the facts of each case differ, the message is consistent: advertised savings must be genuine, capable of substantiation and must not create a misleading overall impression.
Before your next promotion
Check that you can answer “yes” to each of the following questions:
☐ Is the comparison price genuinely the product’s previous selling price?
☐ Would an ordinary customer regard the advertised saving as genuine?
☐ Can we substantiate the product’s pricing and sales history if asked by the ACCC?
☐ Have all advertising channels been reviewed for consistency?
☐ Are the marketing, pricing and compliance teams aligned before launch?
Final thoughts
The Coles decision did not rewrite the law on price comparisons. Instead, it provides one of the clearest explanations of how a court will assess whether an advertised saving is genuine.
Retailers should use the decision as an opportunity to:
review their pricing governance;
strengthen the evidence supporting price comparisons; and
ensure promotions accurately reflect the message customers are likely to understand.
How Watchdog Compliance can help
Watchdog Compliance works with retailers to review price-comparison claims, promotional campaigns, pricing governance frameworks and approval processes before campaigns go live.
Our focus is practical, commercial advice that helps businesses promote genuine value while reducing risk under the Australian Consumer Law.
