Full Federal Court: City Beach $14M Button Battery Penalty Affirmed

• The Full Federal Court affirmed a $14 million penalty against City Beach for failing to comply with mandatory button battery safety standards.
• City Beach breached the Consumer Goods (Products Containing Button/Coin Batteries) Safety Standard 2020 and Information Standard 2020, contravening Australian Consumer Law.
• The court found City Beach had systemic internal failures, including a lack of processes to inform management and prevent the sale of non-compliant products.
• The substantial penalty reflects the very large number of contraventions and the serious danger button batteries pose to children.
• This decision reinforces the ACCC's commitment to strong enforcement against businesses that do not adhere to product safety regulations.

This ruling underscores the ACCC's aggressive enforcement of product safety standards and the severe penalties for non-compliance, even for internal process failures.

The Full Federal Court has upheld a substantial $14 million civil penalty against Fewstone Pty Ltd, which operates as the retailer City Beach. This decision affirms an earlier ruling that found the company in breach of mandatory button battery safety standards, highlighting the serious consequences for non-compliance with consumer protection regulations.

The Australian Competition and Consumer Commission (ACCC) initiated proceedings in April 2025, seeking the $14 million pecuniary penalty. City Beach had proposed a significantly lower penalty of $3.15 million. The Federal Court initially ordered the $14 million payment on December 22, 2025, for the supply of non-compliant products between June 22, 2022, and October 24, 2024. City Beach, a retailer of clothing, shoes, and accessories, sold various inexpensive toys, gadgets, and novelty items, many of which contained small, circular button batteries.

City Beach subsequently appealed the penalty, arguing it was manifestly excessive. However, in the case of Fewstone Pty Ltd v ACCC [2026] FCAFC 104, the Full Federal Court dismissed the appeal and further ordered City Beach to cover the ACCC's appeal costs. The court underscored that the total penalty amount was justified due to the exceptionally large number of contraventions identified.

The penalty stems from City Beach's failure to adhere to the Consumer Goods (Products Containing Button/Coin Batteries) Safety Standard 2020 and/or the Consumer Goods (Products Containing Button/Coin Batteries) Information Standard 2020. These breaches were found to contravene section 106(1) of the Australian Consumer Law (ACL), which is part of Schedule 2 to the Competition and Consumer Act 2010 (Cth).

The safety standard mandates that a consumer good's button battery must not be released during reasonably foreseeable use or misuse, and the battery compartment's design must prevent young children from opening it. The information standard requires prescribed warnings on instructions and packaging for consumer goods containing button batteries, with unpackaged items needing warnings on attached tags or stickers. These measures are designed to protect families, particularly young children, from the severe risks associated with button batteries, which can cause serious injury or death if swallowed or ingested.

The Full Federal Court's decision emphasized the gravity of City Beach's breaches, noting that the company sold numerous non-compliant products. Crucially, the court found that City Beach lacked fundamental internal processes to ensure compliance. This included an absence of a system to transmit vital safety information to its directors or senior managers and no program designed to prevent the sale of non-compliant button battery products.

Despite the ACCC's public awareness campaign regarding mandatory standards and repeated warnings from suppliers and state regulators to City Beach representatives about the standards and existing breaches, the court found that City Beach was unaware of the relevant safety standards or its obligation to ensure compliance. ACCC Commissioner Luke Woodward reiterated the commission's commitment to aggressive enforcement, stating that businesses must take button battery safety seriously and implement effective systems to comply with mandatory standards, or face substantial penalties for non-compliance. This ruling underscores the ACCC's aggressive enforcement of product safety standards and the severe penalties for non-compliance, even for internal process failures.

This ruling underscores the ACCC's aggressive enforcement of product safety standards and the severe penalties for non-compliance, even for internal process failures. Lawyers and compliance officers should advise clients to immediately review and strengthen their product safety compliance systems, particularly for button batteries, ensuring robust internal communication and management oversight to mitigate significant financial and reputational risks.

Source: Original reporting via ACCC statements and Federal Court judgment