A former Coles manager who set prices for its pet foods has hit back at the suggestion increasing sales and earning money was the only motivation for putting a product on promotion, as the supermarket fights a Federal Court case alleging it misled shoppers with its “Down Down” discounts.
The court heard in Melbourne on Thursday an at-times combative exchange between the Australian Competition and Consumer Commission’s lead barrister, Garry Rich, SC, and Paul Carroll, who was the head of Coles’ pet food category, Carroll was being grilled over price-change allegations at the centre of the watchdog’s case.
Nature’s Gift Wet Dog Food in a 12-kilogram tin, which Coles priced at $4 between April 18, 2022, and February 7, 2023, was then increased to a $6 “Every Day price” for a seven-day period, before the supermarket cut it to its third price, $4.50.
Coles promoted this price with a red Down Down discount label, despite it being 50¢ more expensive than it had been sold at eight days earlier, in a move it has since acknowledged was an error and against its internal pricing “guardrails”.
Rich asked Carroll about the difference between Every Day and Down Down pricing, and the internal rules Coles had for when to change them or if it could apply further temporary discounts or increases known as “surging”.
Rich put to Carroll that when negotiating price change requests with suppliers, he was motivated to agree on the new price as well as a plan to reduce it – which should only occur at least four weeks later according to Coles’ policy – to a cheaper Down Down promotional price and red shelf ticket for a longer period. He said this was because promotions increased product sales.
“You’re not being charitable, you are doing it to earn money for your employer,” Rich put to Carroll, who disagreed with the statement, insisting he personally cared about the customer and prices they faced.
The court heard further evidence from email exchanges between Carroll and other Coles colleagues as well as the supplier of the dog food product in question.
On 10 February 2023, two days after the dog food had increased to $6, Carroll emailed then head of pricing and value Chris Reid, asking for advice about how to be more competitive with Woolworths in selling the product, which had a price of $4.50. Reid told Carroll the price could be lowered to compete once a four-week window at $6 had passed, but not advertised as a Down Down special, as it wouldn’t be “in the spirit” of Down Down.
“You were planning to do what Mr Reid told you wasn’t in the spirit of Down Down,” Rich said, which Carroll conceded was correct.
However, Carroll noted staff were encouraged to be competitive, and that Reid had said a lower price of $4.50 would be permissible, as long as it wasn’t promoted with red Down Down stickers and its associated rules.
The hearing continues.
Read the full article here
