Latest / The Front / Why Coles and Woolies are fighting so hard for their ‘fake’ discounts

Transcript

Why Coles and Woolies are fighting so hard for their ‘fake’ discounts · The Front

• 0:03
  Speaker 1: From the Australian. Here's what's on the front. I'm Claire Harvey.
• 0:06
  Speaker 1: It's Wednesday, February eighteen, twenty twenty six. Cultural leaders and
• 0:13
  Speaker 1: artists have deliberately marginalized Jewish Australians. That's according to Archibald
• 0:18
  Speaker 1: and Sulman Prize winning painter Tim Storier. He says art
• 0:22
  Speaker 1: has become driven by ideology and identity politics. Jewish Australians
• 0:32
  Speaker 1: and Palestinians say they're experiencing racism at university campuses. In
• 0:37
  Speaker 1: a new report by the Australian Human Rights Commission, roughly
• 0:40
  Speaker 1: ninety percent out of thirteen hundred Jewish students and staff
• 0:44
  Speaker 1: and one hundred Palestinians surveyed said they had experienced racism
• 0:48
  Speaker 1: directly or indirectly at university. Indigenous, Chinese, Middle Eastern and
• 0:54
  Speaker 1: Northeast Asian respondents all reported experiences of racism at race
• 0:58
  Speaker 1: over eighty percent. Its corporate humiliation on a grand scale.
• 1:08
  Speaker 1: The corporate watchdog the a Triple C is dragging Coals
• 1:11
  Speaker 1: Supermarkets through the Federal Court, seeking to prove the supermarket
• 1:15
  Speaker 1: giant broke the law by misleading shoppers with fake discounts.
• 1:19
  Speaker 1: Regulators are also leveling the same charges at Woolworths. In
• 1:24
  Speaker 1: today's episode, we look at exactly what the retailers are
• 1:27
  Speaker 1: accused of, how they're defending themselves, and what the stakes
• 1:31
  Speaker 1: will be for.
• 1:32
  Speaker 2: Every other retailer.
• 1:38
  Speaker 1: Angelica Snowden is a business reporter with The Australian and
• 1:41
  Speaker 1: she's been in the Federal Court watching Coals try to
• 1:44
  Speaker 1: fight off the corporate watchdog v A Triple C in
• 1:47
  Speaker 1: a case over its down Down discount program. And what
• 1:52
  Speaker 1: exactly is the a trible C accusing Coals of having done?
• 1:56
  Speaker 1: And let's get granular here. I want to hear what
• 1:58
  Speaker 1: they've done with the deodorant and the newd allegedly.
• 2:02
  Speaker 3: Okay, so Claire, what the ariple C is alleging is
• 2:06
  Speaker 3: Coles have effectively misled consumers with their down Down promotion.
• 2:12
  Speaker 3: We all know the promotion, we know the jingle. One
• 2:20
  Speaker 3: of the examples that first off the bat was used
• 2:24
  Speaker 3: in court on Monday when the h PLEC opened their
• 2:27
  Speaker 3: case was a discussion about a can of dog food.
• 2:31
  Speaker 2: So what they said.
• 2:32
  Speaker 3: Was for a period of two hundred and ninety six days.
• 2:36
  Speaker 3: This can of Nature's Gift Wets dog food was advertised
• 2:39
  Speaker 3: for four dollars for a short period of time, it
• 2:43
  Speaker 3: increased in price to six dollars and then immediately afterwards
• 2:49
  Speaker 3: was placed on the Downtown program and advertised at four
• 2:53
  Speaker 3: dollars fifty. So you can see here what the HRIPRAC
• 2:57
  Speaker 3: are saying is that actually the price has not dropped significantly,
• 3:03
  Speaker 3: and in fact the price is actually more than the
• 3:05
  Speaker 3: original four dollars.
• 3:07
  Speaker 1: And of course Coals would argue that the price of
• 3:09
  Speaker 1: everything is going up, that they have absorbed price rises
• 3:12
  Speaker 1: on a whole lot of products, but.
• 3:13
  Speaker 2: They can't keep doing that forever.
• 3:15
  Speaker 3: That's exactly what they're arguing. That we're experiencing intense inflation,
• 3:19
  Speaker 3: so they're battling with that. They're also battling suppliers on
• 3:24
  Speaker 3: the other hand, who are negotiating with them about price
• 3:27
  Speaker 3: increases as well. So you can see the push and
• 3:31
  Speaker 3: pull that they're dealing with here. But ultimately the HBAC
• 3:35
  Speaker 3: is pushing this case. It first launched about eighteen months ago,
• 3:38
  Speaker 3: and now they're fighting it out in the federal court.
• 3:44
  Speaker 2: It's interesting, isn't it. Andrew.
• 3:45
  Speaker 1: I don't know about you, but I walk around the
• 3:47
  Speaker 1: supermarket kind of ignoring the discount signs because I'm a
• 3:49
  Speaker 1: bit cynical about them. I don't really think that often
• 3:53
  Speaker 1: they are real discounts, and if you look closely, it
• 3:55
  Speaker 1: might be fifteen cents or five cents, that is the
• 3:57
  Speaker 1: discount it's being advertised. What do you think do consumers
• 4:01
  Speaker 1: really expect that a discount sticker means something these days?
• 4:05
  Speaker 3: I would have agreed with you, Claire. However, this case
• 4:09
  Speaker 3: is very interesting because the ahriple c was actually tipped
• 4:12
  Speaker 3: off by consumers in particular on social media, who were
• 4:16
  Speaker 3: tracking these strange price fluctuations.
• 4:19
  Speaker 4: Suck Coals. It was twelve, it's now ten from seven
• 4:24
  Speaker 4: dollars fifty.
• 4:26
  Speaker 1: Here's a product that's fifteen fifty, save fifteen fifty. But
• 4:29
  Speaker 1: if you look at the price history, it's been alternating
• 4:31
  Speaker 1: between those two prices every seven days.
• 4:34
  Speaker 2: Here we go again, Coles trying to dupe us.
• 4:36
  Speaker 1: All half the price was nineteen dollars, No one, sixteen
• 4:41
  Speaker 1: dollars ten.
• 4:43
  Speaker 3: We basically have social media investigators examining really closely the
• 4:48
  Speaker 3: price changes and how they compare with what Coals are
• 4:52
  Speaker 3: telling us is being discounted, and it makes sense. We
• 4:56
  Speaker 3: have seen huge price increases across groceries acros every day
• 5:00
  Speaker 3: household items. It makes sense to me that consumers would
• 5:03
  Speaker 3: be keeping a very close eye on claims like these.
• 5:09
  Speaker 1: When the corporate watchdog goes after a company for doing
• 5:13
  Speaker 1: anything any breach of consumer law, one option for the
• 5:16
  Speaker 1: company is to settle that and go into negotiations, agree
• 5:19
  Speaker 1: to pay some sort of penalty, say that they're sorry,
• 5:22
  Speaker 1: make it all go away. That hasn't happened in this instance.
• 5:26
  Speaker 1: Do you know why did Coles try to settle this
• 5:29
  Speaker 1: out of court?
• 5:29
  Speaker 3: I think the issue is that the parties are too
• 5:32
  Speaker 3: far away from each other, and frankly, this is a
• 5:35
  Speaker 3: very good opportunity for the ahrible C to really show
• 5:39
  Speaker 3: its teeth, particularly on this issue. I don't know if
• 5:43
  Speaker 3: they had attempted to settle prior, but as I understand
• 5:47
  Speaker 3: it from listening to two days of court hearing so far,
• 5:52
  Speaker 3: that the question is very simple for the court to determine,
• 5:56
  Speaker 3: which is what did the tickets convey and was it misleading?
• 6:01
  Speaker 3: And clearly the AGABLEC and Coals are at a log
• 6:05
  Speaker 3: ahead about whether or not it was.
• 6:08
  Speaker 1: Does the AGABLEC have to prove that Coals had an
• 6:11
  Speaker 1: intention to deceive or just that the effect of them
• 6:14
  Speaker 1: for the ordinary reasonable shopper was that they were misleading.
• 6:18
  Speaker 3: They have to prove that the ordinary and reasonable shopper
• 6:22
  Speaker 3: was misled by the claims. What Coles say in their
• 6:26
  Speaker 3: defense is that the price drops were faired income. These
• 6:30
  Speaker 3: are words that we heard in the federal court. They
• 6:32
  Speaker 3: say the price drops were genuine, they were fared income.
• 6:35
  Speaker 3: So if we take the tin of dog food example,
• 6:38
  Speaker 3: the tin started at six dollars and it dropped to
• 6:42
  Speaker 3: four dollars fifty, they say this was a genuine price drop,
• 6:46
  Speaker 3: and therefore the ordinary consumer would think, fine, it's on sale.
• 6:56
  Speaker 2: This is big business.
• 6:57
  Speaker 1: These are some of the most powerful companies in this
• 7:00
  Speaker 1: alien marketplace. They of course have I'm sure pretty watertight
• 7:03
  Speaker 1: contracts with their staff, and their internal communications are.
• 7:06
  Speaker 2: All locked up.
• 7:07
  Speaker 1: It seems though, that the HRIABLEC has got access to
• 7:09
  Speaker 1: some internal coals documents. How did they get those and
• 7:13
  Speaker 1: what are they showing.
• 7:14
  Speaker 3: We haven't seen the internal documents yet, but we know.
• 7:18
  Speaker 3: As I said, this investigation started off with consumer tips
• 7:23
  Speaker 3: as well as social media investigations. What we know is
• 7:27
  Speaker 3: that the A Trible C exercised its right to conduct
• 7:30
  Speaker 3: a really thorough investigation and from the documents that I
• 7:34
  Speaker 3: have seen that track the differences in price and price
• 7:40
  Speaker 3: drops for about two hundred and sixty products two hundred
• 7:44
  Speaker 3: and fifty products for Coals over period of eighteen months.
• 7:48
  Speaker 3: There's forensic tracking of fluctuations and volatility in prices. On Monday,
• 7:54
  Speaker 3: what was discussed in court were internal emails that were
• 7:58
  Speaker 3: exchanged between Coals staff members. The context of that was
• 8:03
  Speaker 3: is that they were aware of Woolwors engaging in similar
• 8:07
  Speaker 3: conduct and effectively, they were really concerned that they wouldn't
• 8:11
  Speaker 3: be able to compete with wool Words if their price
• 8:14
  Speaker 3: drops were happening as quickly and as widespread as they were.
• 8:20
  Speaker 3: So in one example, we saw a Cole staff member
• 8:24
  Speaker 3: actually asking another colleague if they should alert the AHRIBLEC
• 8:27
  Speaker 3: to this conduct. However, instead what they sought to do
• 8:32
  Speaker 3: was ramp up I guess the rate at which they
• 8:35
  Speaker 3: would add products to their down down program.
• 8:38
  Speaker 1: I'm so glad you mentioned Woolies because it's the two
• 8:41
  Speaker 1: year anniversary nearly and of the twenty twenty four moment
• 8:45
  Speaker 1: when Brad Banducci blew up his career on television. This
• 8:49
  Speaker 1: was the former chief executive of Woolworths. He was doing
• 8:51
  Speaker 1: in an interview with BABC and it was asked about
• 8:54
  Speaker 1: some comments from a former competition watchdog Rod Simms about
• 8:58
  Speaker 1: Coals and Woolies being allegedly anti competitive. Brad Banducci had
• 9:02
  Speaker 1: to go at him and then he tried to retract
• 9:04
  Speaker 1: those comments, and when he wasn't allowed to retract them,
• 9:06
  Speaker 1: he stormed out of the interview.
• 9:08
  Speaker 4: Okay, well can we take that out? Is that? Okay?
• 9:13
  Speaker 4: I mean he is retired, but I shouldn't have said that.
• 9:17
  Speaker 4: Are we going to leave it in there? If we are?
• 9:19
  Speaker 3: Well, I mean we're on the record he said it.
• 9:22
  Speaker 4: I mean, you know, let's let's move on. But yeah, yeah, no,
• 9:26
  Speaker 4: I think I'm done. Guys. You know I do this
• 9:29
  Speaker 4: is a good intent. You know, I don't do this
• 9:31
  Speaker 4: a bad intent. You're walking out? Really? No, no? Can
• 9:34
  Speaker 4: we just talk about.
• 9:37
  Speaker 1: Very shortly afterwards, he left his role as Sea of Wilworts.
• 9:40
  Speaker 1: But Warlworts is also very much in the frame of
• 9:43
  Speaker 1: the A Triple C. So where are those proceedings against
• 9:46
  Speaker 1: Woolworths at and are they basically accused of doing the
• 9:48
  Speaker 1: same thing?
• 9:49
  Speaker 3: Well, was are accused of doing essentially the same thing
• 9:53
  Speaker 3: across a range of everyday items, similar time period they
• 9:57
  Speaker 3: have also been accused of misleading consumers. But with their
• 10:00
  Speaker 3: prices dropped, program Woollies are really going to be sweating
• 10:03
  Speaker 3: on this one, Claire. It's a big deal. There's big
• 10:06
  Speaker 3: money involved here. They're not in the courtroom yet but
• 10:11
  Speaker 3: due to start in late April early May.
• 10:14
  Speaker 2: Yeah.
• 10:14
  Speaker 1: And there's also a class action going on against both
• 10:17
  Speaker 1: these supermarkets, brought by consumers who reckon they've been ripped off.
• 10:21
  Speaker 1: How are the courts handling the fact that this is
• 10:24
  Speaker 1: these other lawsuits going on at the same time.
• 10:26
  Speaker 3: Yes, they're being heard at the exact same time, because
• 10:29
  Speaker 3: as I understand it, their allegations are very similar. So Cole's,
• 10:33
  Speaker 3: for example, the HBC case is live, as is the
• 10:37
  Speaker 3: class action against Coals, and that's what I understand to
• 10:40
  Speaker 3: be happening with Woolies too.
• 10:41
  Speaker 2: Lots of lawyers, lots of money.
• 10:43
  Speaker 3: The lawyers always win, as they say, let's.
• 10:57
  Speaker 1: Talk about the stakes here for Coals and of course
• 11:00
  Speaker 1: Woolworth and every other retailer in the Australian marketplace.
• 11:03
  Speaker 2: The supermarkets have had a rough kind of decade or so.
• 11:06
  Speaker 1: First, they introduced milk for just one dollar, which saw
• 11:10
  Speaker 1: farmers accuse them of ripping them off. During COVID, people
• 11:14
  Speaker 1: were fighting each other in the supermarket ass for toilet paper,
• 11:17
  Speaker 1: and they've had turnover of chief executives for some of
• 11:21
  Speaker 1: the reasons we've mentioned above. How does this compare, do
• 11:24
  Speaker 1: you think in terms of reputational risk for Coals and Woolies.
• 11:28
  Speaker 3: It's a really interesting question, and I will never forget
• 11:31
  Speaker 3: the footage of people fighting over toilet paper, by the way,
• 11:34
  Speaker 3: during COVID stuck in my mind forever. But this question
• 11:38
  Speaker 3: about reputational risk is very interesting. I was just discussing
• 11:41
  Speaker 3: it with a colleague who pointed out to me that Coals,
• 11:46
  Speaker 3: compared to Woolworths share price over the last couple of months,
• 11:51
  Speaker 3: is outperforming Woolies. So when you talk about reputational risk,
• 11:56
  Speaker 3: I guess the market isn't too concerned with these allegations
• 11:59
  Speaker 3: at the moment. But what will be very interesting is
• 12:04
  Speaker 3: the outcome of the case. Should the federal court find
• 12:07
  Speaker 3: that consumers were misled by the downdown program, it seems
• 12:13
  Speaker 3: to me that would cause a fair bit of reputational
• 12:17
  Speaker 3: damage given how widespread this program is. We all know
• 12:21
  Speaker 3: the program the down Down jingle, as I said, so
• 12:24
  Speaker 3: I would say they're at risk of reputational damage.
• 12:28
  Speaker 1: The A Triple C is an independent agency, of course,
• 12:32
  Speaker 1: but this is a great look for the federal government,
• 12:34
  Speaker 1: which wants consumers taxpayers to think that they care about
• 12:38
  Speaker 1: the cost of living, that government agencies are doing everything
• 12:41
  Speaker 1: that they can to make sure shoppers get a fair deal.
• 12:44
  Speaker 1: Gina Cascottlieb is the head of the A Triple C,
• 12:47
  Speaker 1: and she came into the job saying she was going
• 12:49
  Speaker 1: to go after petrol retailers and supermarkets. How do you
• 12:53
  Speaker 1: think she's shaping up in this role and how is
• 12:56
  Speaker 1: business responding to this kind of campaign of terror that
• 12:59
  Speaker 1: she's running.
• 13:00
  Speaker 3: I think Gena Cascottlieb has shown over the last eighteen
• 13:05
  Speaker 3: months two years in particular, that the AGABRAC is prepared
• 13:09
  Speaker 3: to take big business identities individuals to court if they
• 13:15
  Speaker 3: believe they are doing the wrong thing and they have
• 13:17
  Speaker 3: a strong enough case, they're not afraid to attempt to
• 13:21
  Speaker 3: prosecute them. This is a pretty big change from a
• 13:25
  Speaker 3: few years before that, I suppose, when regulators like the
• 13:29
  Speaker 3: AHABRAC were copping a lot of criticism about failing to
• 13:33
  Speaker 3: take crooks to court and to challenge potential wrongdoing. That
• 13:38
  Speaker 3: members of the community had seen. I think for Gina
• 13:41
  Speaker 3: Cascottlieb in particular, she's the chair of the Competition Watchdog,
• 13:46
  Speaker 3: which is really a watchdog for the everyday man and
• 13:50
  Speaker 3: women and the mums and dads who are walking down
• 13:52
  Speaker 3: the aisles of coals and Woollies trying to reduce the
• 13:56
  Speaker 3: cost of their weekly shops, for example. So I think
• 14:00
  Speaker 3: they need to show that they are doing something about
• 14:04
  Speaker 3: concerns that the community has and that they can.
• 14:06
  Speaker 2: Act on them. Angelicas Noden, thank you very much. Thank you.
• 14:17
  Speaker 1: Angelicus Noden is a business reporter with The Australian. You
• 14:20
  Speaker 1: can check out her rolling coverage of this story and
• 14:23
  Speaker 1: all the nation's best business reporting right now at Beaustralian
• 14:27
  Speaker 1: dot com dot au