Coles misled Australian shoppers by promoting fake “Down Down” discounts on everyday grocery products, the federal court has ruled in a landmark decision for the supermarket industry.

Justice Michael O’Bryan handed down his judgment on Thursday, delivering a significant blow to Australia’s second-largest supermarket chain, which had argued that the discounts represented genuine savings during a period of high inflation.

The Australian Competition and Consumer Commission sued Coles and its rival Woolworths , accusing the supermarket giants of duping shoppers between 2021 and 2023 by using promotional programs to disguise price increases on hundreds of products.

O’Bryan’s verdict in the Coles case – which was heard in February – comes before his decision in a similar trial against Woolworths, which was heard in Sydney in late April and early May and which the judge will rule on later this year.

In the Coles case, the supermarket sold 245 products at one price for a median period of a year, then increased…