Woolworths Faces Legal Scrutiny Over 'Prices Dropped' Promotional Practices
Woolworths’ ‘Prices Dropped’ rules intended to prevent ‘gaming’ the promotional system, executive tells court
The Guardian
Image: The Guardian
Woolworths' chief commercial officer, Paul Harker, defended the supermarket's 'Prices Dropped' promotional program in court against allegations from the Australian Competition and Consumer Commission (ACCC). The ACCC claims Woolworths misled customers by temporarily raising prices before offering discounts, violating internal policies meant to protect consumers.
- 01Woolworths is accused of misleading discount practices by the ACCC.
- 02The supermarket allegedly raised prices on 266 products before promotions.
- 03Changes to internal pricing policies reduced the required price stability period.
- 04Woolworths claims adjustments were made in response to inflation.
- 05The outcome of the trial could impact consumer trust in promotional pricing.
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During a landmark trial in the federal court, Paul Harker, chief commercial officer of Woolworths, defended the supermarket's 'Prices Dropped' promotional program against allegations from the Australian Competition and Consumer Commission (ACCC). The ACCC claims that between September 2021 and May 2023, Woolworths raised prices on at least 266 products before offering them at supposedly discounted rates, which were often higher than the original prices. Harker acknowledged that the company relaxed its internal policies, known as 'guardrails', which previously required products to be sold at a stable price for at least nine months before being eligible for promotion. The timeframe was reduced to as little as three to six weeks. Harker stated that these changes were necessary due to rising inflation, shifting the focus from managing supplier dynamics to consumer pricing. The case centers on whether Woolworths intentionally manipulated pricing to mislead customers about discounts, raising concerns about consumer trust in promotional practices.
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If the ACCC's allegations are proven, it could lead to stricter regulations on promotional pricing, affecting how supermarkets operate and potentially increasing prices for consumers.
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