Australians are one step closer to knowing if Woolworths and Coles misled them with price hikes disguised as discounts, as the consumer watchdog's case winds down.
The Australian Competition and Consumer Commission's action alleges the supermarket giants used temporary price hikes and subsequent "illusory" discounts to disguise price increases and mislead shoppers between September 2021 and May 2023.
After Coles gave its defence in February, Woolworths' two-week Federal Court hearing wrapped up in Sydney on Friday, with Justice Michael O'Bryan reserving judgment for both companies until a later date.
Woolworths broke its own guardrails at different times in its price establishment periods and "resting periods" between promotions, the ACCC's legal team argued.
Justice O'Bryan said the supermarket chain's own standards were of little relevance.
“It's really just about whether it's objectively a reasonable period, an ordinary price offered for a reasonable period," he told the court on Friday.
“That question is ultimately a question for the court to determine objectively on all the facts."
The commission's case against Woolworths related to 266 products including Tim Tams biscuits, Sakata rice crackers, Dolmio sauces, Doritos salsa and Energizer batteries -whittled down to a sample list of 12 products to be examined by the court.
Woolworths' legal team argued its temporarily elevated prices were sparked by increase requests from suppliers, against a backdrop of rising inflation and post-pandemic supply chain disruptions.
Its prices, even when temporarily elevated, were genuine, competitive, and held for a reasonable period, the group's barrister Robert Yezerski SC argued.
"The question of time, we think really either disappears entirely or reduces only to the proposition that the time ... can't be so short as to undermine genuineness," he told the court.
"Genuineness is established by a whole range of factors, and so time really doesn't enter into it at all."
Sales volumes for items at the raised prices, sometimes in the hundreds of thousands, also underlined their authenticity, Mr Yezerski said.
The watchdog argued the use of regular, white price tickets for the short-term prices was misleading because they implied a level of stability to the consumer.
"They could raise the price up for three weeks, and then they could drop it back down with the intention, anticipation that that new, dropped price might then be in the market for six months or a year or two years or three years," ACCC silk Michael Hodge KC said.
"And in all cases, continuing to promote that it's a dropped price from a price that has only existed for three weeks.
“And that's part of the quality that the ACCC says makes the representation of a genuine reduction misleading.”
The watchdog claimed Woolworths considered raising a price for as little as two weeks before dropping it to above the original price.
"But whether they're going to drop it in two weeks or three weeks or four weeks, they're going to then have this price for a very short period of time, and then they're going to drop it," Mr Hodge said.
Justice O'Bryan gave the legal teams two weeks to provide an appendix to agree on gross profit percentage calculations and deferred supplier deals.
Woolworths' legal team will also be given the right to reply to matters raised by the commission in Friday's hearing before a decision is handed down.
The maximum penalty for Australian Consumer Law breaches increased in November 2022, part-way through the period under scrutiny.
Each breach from that date could attract fines of the greatest of: $50 million; three-times the benefit obtained; or 30 per cent of adjusted turnover during the time in question.
