Woolworths Faces ACCC Action Over Fake Discount Allegations

The Australian Competition and Consumer Commission (ACCC) has launched Federal Court proceedings against Woolworths, alleging the supermarket giant misled consumers through fake discount claims as part of its “Prices Dropped” marketing program.

The case, which began on Tuesday, April 21, 2026, in Sydney, follows a nearly identical action against Coles that is awaiting judgment. The ACCC contends that Woolworths created the illusion of price reductions on hundreds of everyday grocery items when, in many instances, prices had actually increased or remained unchanged.

According to reporting from The Guardian, products under scrutiny include vinegar, Tim Tams, baby rice, rice crackers, pasta and Oreos. The watchdog alleges these items were promoted with misleading signage suggesting savings that did not reflect actual price movements.

Woolworths has denied the allegations, maintaining that any price adjustments were driven by supplier cost increases and that the discounts offered were genuine. A company spokesperson told The Guardian that following the pandemic, Woolworths remained “acutely aware that customers expected [it] to provide value wherever possible.”

The Sydney Morning Herald reported an internal analysis indicating that Woolworths claimed to have “Price Dropped” 276 products, but 96% of those items ultimately cost more than before the promotion was applied. This figure has become a central point of contention in the proceedings.

During hearings, the Federal Court was told that Woolworths may have contravened its own internal guidelines for the “Prices Dropped” promotion. ABC News reported that evidence presented suggested inconsistencies between the company’s stated pricing policies and how discounts were implemented in stores.

Allan Fels, former chairman of the ACCC, described the Coles case as “the case of the century” and suggested the Woolworths proceeding could be equally significant. He warned that if the regulator fails to prove its claims, it could face a credibility challenge, while a successful outcome might prompt broader scrutiny of discount pricing practices across industries.

Woolworths’ legal team, led by Robert Yezerski SC, is expected to mount a vigorous defence, arguing that the ACCC’s characterization of the promotions as “illusory” misrepresents the commercial reality of supply chain costs and consumer expectations during a period of economic volatility.

The hearings are scheduled to run for approximately two weeks, with judgment reserved. The outcome could influence how Australian retailers structure and communicate promotional pricing, particularly amid ongoing cost-of-living pressures and heightened regulatory attention on consumer trust in the grocery sector.