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Twelve Weeks: The Federal Court Decision That Could Change Retail Discount Pricing in Australia

A single tin of dog food may have helped reshape retail discount pricing in Australia.

In a recent Federal Court decision against Coles Group, the Court found that aspects of Coles’ “Down Down” pricing campaign were misleading under Australian Consumer Law. More importantly, the judgment introduced something retailers have long lacked: clearer guidance on when a “was/now” price comparison may be considered genuine.

The number? Twelve weeks.

The case centred on a pricing practice that many consumers would recognise. A product would be sold at one price for an extended period, briefly increased, and then later promoted as being “discounted” from that higher price.

One example considered by the Court involved Nature’s Gift Wet Dog Food. For almost ten months, the product was sold for $4. The price then increased to $6 for a short period of seven days. Shortly afterwards, the price reduced to $4.50 and was promoted with a familiar message: “Was $6, Now $4.50”.

The issue, according to the Court, was that the higher “was” price had only existed briefly, while the product had been sold at a lower price for the vast majority of the preceding period.

In other words, consumers may have been left with an inflated impression of the value of the discount.

That example is now significant for retailers across Australia because the Court did more than criticise the conduct, it provided a practical benchmark. Justice Michael O’Bryan indicated that, for a “was” price to carry real meaning, the higher price should generally have applied for at least twelve weeks.

For retailers, marketing teams and pricing managers, that finding may have significant implications.