A former manager who set prices for Coles pet food has hit back at suggestions that Coles supermarkets’ only motive for promoting its products was to boost sales and make money, as he fights a federal court case accusing Coles of misleading shoppers with its “down-down” discounts.

The court heard in Melbourne on Thursday the sometimes acrimonious exchange between South Carolina Garry Rich, chief barrister of the Australian Competition and Consumer Commission, and Paul Carroll, head of Coles’ pet food division, who was being pursued over price-fixing allegations at the center of the watchdog’s case.

The 12kg can of Nature’s Gift wet dog food, which Coles sold for $4 from April 18, 2022 to February 7, 2023, was then increased to an “everyday price” of $6 for seven days only, before the supermarket reduced the price to a third price of $4.50.

Kohl’s advertised this price with a red “Down Down” discount label, even though it was 50 cents higher than the price it had been selling for eight days earlier, which it later admitted was a mistake and violated its internal pricing “guardrails.”

Mr. Rich asked Mr. Carroll about the differences between Everyday and Down-Down pricing, and the internal rules Kohl’s has in place about when to change prices and whether additional temporary discounts or price increases, known as surging, can be applied.

Mr. Rich told Mr. Carroll that when negotiating price change requests with suppliers, there was an incentive to agree to new prices and a plan to reduce prices only after at least four weeks, according to Coles policy, to lower promotional prices and long-term red shelf tickets. He said this was because promotions increased product sales.

“You’re not doing charity work. You’re doing it to make money for your employer,” Rich asked Carroll, a statement that Carroll disagreed with and argued that he personally cared about his customers and the prices they faced.

The court heard further evidence from email correspondence between Carroll and other colleagues at Coles and the supplier of the dog food product in question.

On February 10, 2023, two days after the price of dog food rose to $6, Carroll emailed Chris Reed, then head of pricing and value, asking for advice on how to be more competitive with Woolworths in selling the product, which was priced at $4.50. Mr. Reed told Carroll that he could compete by lowering the price once the $6 four-week window was over, but that it could not be advertised as a Down Down special because that would go against the “spirit” of Down Down.

“You were going to do something that Mr. Reed said was against the spirit of ‘Down Down,'” Rich said, and Carol acknowledged that he was right.

However, Carroll pointed out that staff are encouraged to be competitive and that Reid has said prices as low as $4.50 are acceptable as long as they are not advertised with red down stickers and associated rules.

The hearing continues.