Coles is being sued by local tobacconists who claim they are are being put out of business because the supermarket giant is selling cigarettes for less than the market price.
Former local tobacconists Anthony, Rebecca and Michael Rachelle are taking the Australian retail giant to the Victorian Federal Court on Friday after being forced to shut down their businesses.
The trio claim they were forced to close down because they couldn’t compete with Coles’ incredibly low cigarette prices.
The trio claim they were forced to close down because they couldn’t compete with Coles’ incredibly low cigarette prices (stock)
In their statement to the courts, the trio claim that Coles is using its market power to sell cigarettes from the top three companies – British American Tobacco, Imperial Tobacco Australia and Phillip Morris – at below market price.
‘[Coles] has used its substantial degree of market power in the market of acquiring and supplying tobacco products to consumers in Australia, for the purpose of or likely having the effect of substantially lessening competition in the market,’ The Age reported the statement as saying.
The Rachelles claim their customers were convinced they were being overcharged because they could get the same products far cheaper at Coles.
They say this resulted in so much damage to their stores’ finances and reputations that they were forced to close down and sell the businesses.
The Rachelles claim their customers were convinced they were being overcharged because they could get the same product far cheaper at Coles (stock)
Michael Rachelle said he had to sell his business for $10,000 after paying more than $70,000 to set it up.
Anthony Rachelle made a submission to a parliamentary inquiry into franchising in 2018, stating he and other tobacconists were bullied by the cigarette companies.
He claimed Coles was selling their British American Tobacco products for almost $40 less than the wholesale price he is charged by his supplier.
Mr Rachelle did not specify which product he was charged that price for.
The trio told the publication that they will be representing themselves in court after spending more than $12,000 to get a solicitor.
‘Any further representation was going to be completely beyond the realms of anything we could afford, so we’re just winging it at the moment,’ Mr Rachelle said.
‘We sold our businesses for next to nothing as the value of them was destroyed.’
Coles at Wynyard Station (pictured) sells Winfield Original 20 packs for $33.95 – slightly more than a nearby tobacconist but less than a convenience store in the same area
EzyMart on George Street (pictured) sold both Winfield Original and Crush for the same price
Daily Mail Australia visited the EzyMart convenience store on Kent Street in Sydney’s CBD and a nearby tobacconist to compare the price for some of their cigarettes to what is on offer at Coles and its main competitor, Woolworths.
The results showed that while Coles’ cigarette prices were less than the convenience stores’, Woolworths was cheaper overall.
EzyMart on Kent Street sells Winfield Original 20 packs – a British American Tobacco product – for $34 while a pack of 25 goes for $41.
Their Winfield Crush 20 pack is sold for $35 and the 25 pack for $42.
EzyMart on nearby George Street sold both Winfield Original and Crush for the same price – a pack of 20 costs $35 and and a 25-pack is $45.
The King of the Pack tobacconist on Sussex Street told Daily Mail Australia that they change their prices every Monday.
They sell Winfield Original 20 pack for less than EzyMart at $30.80 and a pack of 25 goes for $37.80.
Woolworths at Wynyard Station (pictured) sells Winfield Original 20 packs for just $28.95 – less than all other stores Daily Mail Australia visited
Coles at Wynyard Station sells Winfield Original 20 packs for $33.95 – slightly more than King of the Pack but less than EzyMart.
The Winfield Original 40 pack is sold in Coles for a whopping $54.95.
Woolworths at Wynyard Station sells Winfield Original 20 packs for less than the other stores at just $28.95. Their pack of 25 is $34.95 – the same as what a pack of 20 goes for at the convenience stores.
King of the Pack (pictured) on Sussex Street in Sydney sells Winfield Original 20 packs for $30.80 and a pack of 25 for $37.80
From September, Australians will be paying one of the highest prices in the world for a packet of cigarettes, with a 25 pack of Marlboro Golds costing an eye-watering $48.50.
The cheapest pack will be about $29.
The price hike will be the eighth consecutive yearly increase, and is part of the government’s attempt to reduce tobacco use.
Daily Mail Australia has contacted Coles for comment.