Woolworths on trial over 'Prices Dropped' promotions amid 'marketing magic' claim

The Australian Competition and Consumer Commission (ACCC) has opened a Federal Court proceeding alleging that Woolworths Group’s ‘Prices Dropped’ promotions misled shoppers by creating an illusion of genuine discounts through strategic price increases followed by ‘discounted’ labels. The trial commenced in Sydney on April 21, 2026, and centres on whether temporary price spikes were used to manufacture a higher reference ‘was’ price.

According to the ACCC’s case materials, Woolworths temporarily raised prices on at least 266 products between September 2021 and May 2023 before reintroducing them under ‘Prices Dropped’ at prices that were often equal to or higher than the pre-spike levels. The regulator has highlighted specific items — including family packs of Oreos and Arnott’s Tim Tams — to illustrate how short-term price movements produced the appearance of discounts. Woolworths has narrowed the contested product list for trial purposes and denies engaging in misleading conduct.

Woolworths’ defence points to inflationary pressures and rising input costs affecting grocery pricing, arguing that price changes reflected broader market conditions rather than a deliberate scheme to mislead consumers. The company also stopped the campaign after the ACCC initiated legal action. ACCC lawyers, however, have argued that the marketing message deliberately implied a sustained reduction in regular prices when that was not the case.

The outcome of the case could reshape how supermarkets frame promotions and report reference prices. A finding for the ACCC may lead to higher compliance costs, altered labelling practices and potentially significant penalties or remedial orders, including community service-type remedies the regulator has sought in related proceedings. The litigation also contributes to ongoing scrutiny of supermarket pricing tactics and consumer protection enforcement in Australia.

Analysts and legal commentators say the trial will set an important precedent for advertising and pricing behaviour in the retail sector. With a parallel case against Coles already heard, regulators and investors will watch for rulings that clarify acceptable promotional mechanics and potential consequences for misleading price claims. For shareholders, the proceedings underscore reputational and operational risks that can affect short-term performance and long-term brand value.