Coles has admitted in the Federal Court that it engaged in conduct that pressured a supplier during its high-profile ‘Down Down’ discount pricing campaign, as proceedings brought by the competition regulator continued to unfold.

The supermarket chain acknowledged that it threatened to remove or significantly reduce the ranging of a beverage supplier’s products unless the supplier agreed to provide additional payments linked to price promotions.

The conduct occurred during the retailer’s long-running ‘Down Down’ campaign, which centred on lowering shelf prices across a wide range of grocery items and was heavily promoted to consumers.

The Australian Competition and Consumer Commission alleges that Coles misused its substantial market power by seeking payments from the supplier that were not contractually required and by leveraging the potential loss of shelf space to secure financial concessions.

In court, Coles accepted that aspects of its behaviour contravened competition law and that the pressure exerted on the supplier went beyond what was permissible in commercial negotiations.

The case forms part of broader scrutiny of supermarket practices in Australia, where major retailers have faced increasing examination over their dealings with suppliers amid cost-of-living pressures and intense competition in the grocery sector.

The regulator argues that such conduct can distort bargaining dynamics and disadvantage smaller suppliers who rely heavily on access to supermarket distribution channels.

Coles told the court it has since strengthened its internal compliance frameworks and supplier engagement policies, emphasising its commitment to fair dealing and lawful commercial conduct.

The company said it continues to cooperate with the regulator and is focused on maintaining constructive relationships with suppliers across its network.

The Federal Court is expected to determine penalties and other orders at a later stage, including potential financial sanctions and compliance undertakings.

The outcome is likely to have implications for how Australia’s major supermarkets structure promotional campaigns and negotiate funding arrangements with suppliers in the future.