Coles, Woolworths pricing court battle to focus on supplier costs
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The news: Lawyers for Coles have told the Federal Court of Australia that in almost every case, price rises linked to a consumer lawsuit brought against the supermarket by the regulator were initiated by suppliers.
Woolworths told the same court in a joint case management hearing on Wednesday that any price increases were initiated by suppliers increasing their prices, which led to new standard prices that were not permanent.
Both supermarkets have said they plan to fight the Australian Competition and Consumer Commission's (ACCC) lawsuits, telling Federal Court Judge Michael O'Bryan today in Melbourne that there will not be many agreed facts in the cases.
Both cases will return before O'Bryan at a date to be fixed in early December.
The numbers: The ACCC has alleged that Woolworths and Coles each sold products at regular long-term prices which remained the same, excluding short-term specials, for at least six months and in many cases for at least a year.
The products were then subject to price rises of at least 15% for brief periods, before being placed in Woolworths’ ‘Prices Dropped’ promotion and Coles’ ‘Down Down’ promotion, at prices lower than during the price spike but higher than, or the same as, the regular price that applied before the price spike.
The ACCC alleged the conduct involved 266 products for Woolworths at different times across 20 months, and 245 products for Coles at different times across 15 months.
The context: The ACCC's court proceedings come as the regulator is also conducting a broad inquiry into the supermarket industry, which will require the executives of both Coles and Woolworths to give evidence to the regulator in coming weeks.
What they said: Appearing before O'Bryan on behalf of Coles, barrister John Sheahan KC said prices were increased in response to suppliers facing cost increases "in a period of sudden high inflation".
Sheahan said that evidence in the case will show that when suppliers requested price increases "they were tested and investigated by Coles" to ensure they were well founded.
Cameron Moore SC, who appeared on behalf of Woolworths, told O'Bryan that "factually, the ACCC's case is misconceived".
ACCC barrister Sarida Mcleod, said none of the supermarkets' assertions about the regulator's case took the ACCC by surprise. "Be that as it may, the conduct is still misleading, but this is not the forum to get into that," she said.
The source: Federal Court
