Australian Competition and Consumer Commission v Fewstone Pty Ltd (Penalty)

This proceeding was brought by the ACCC against Fewstone Pty Ltd as trustee for the City Beach Trust, trading as City Beach. City Beach was described as primarily a clothing and accessories retailer operating nationally and internationally, with sales through physical stores and online. It also sold novelty products sourced from third-party manufacturers or wholesale suppliers. Some of those novelty products contained button or coin batteries.

The case was a penalty proceeding. City Beach admitted that it had supplied and offered for supply products containing button or coin batteries that did not comply with mandatory safety and information standards under the Australian Consumer Law. The dispute for the Court was the appropriate penalty and related orders. Downes J ultimately imposed the $14 million penalty sought by the ACCC, together with costs and a range of compliance and recall-related orders.

The commercial significance of the case is that it was not framed as a failure by a manufacturer alone. The Court's declarations were directed to the retailer's own conduct in supplying and offering non-compliant products. That is an important point for any business that buys finished products from others and resells them through its own retail systems.

The timing matters in this case because the standards did not become mandatory immediately when they were first made. The Court recorded that the button battery standards commenced on 22 December 2020 and included an 18-month transition period. The requirements became mandatory on 22 June 2022. The admitted contraventions then ran from 22 June 2022 to 24 October 2024, with later compliance issues also identified in 2025.

That timeline is useful for businesses because it shows the Court was dealing with conduct that occurred well after the transition period had ended. The case also shows that compliance obligations do not stop at the point a business begins remediation or starts a recall. City Beach had already begun working with the ACCC and had commenced a voluntary recall on 1 March 2024, but further sales of non-compliant products were still later identified.

The Court recorded that the mandatory standards apply to all consumer goods powered by a button battery. The Safety Standard dealt with product design and battery compartment requirements. The Information Standard required prescribed warnings on instructions, packages, and stickers or tags. In this case, the affected goods were novelty products sold by City Beach, but the reasoning is not limited to novelty retail. Any business supplying consumer goods powered by button batteries should read the case carefully.

The facts also show how easily these issues can be missed in a retail environment. Novelty products made up only about 2% of City Beach's total product range by sales. Even so, the admitted contraventions were extensive. That is a practical warning for businesses with broad product ranges: a relatively small category can still create major regulatory exposure if no one is clearly responsible for checking whether mandatory standards apply.

The case is especially relevant to retailers, importers, distributors and online sellers that source finished products from third parties. It also matters to businesses with separate buying, store, ecommerce and compliance functions, because the failures here were not limited to one team. Supplier warnings, store-level regulator contact, head office responses and system controls all featured in the factual story.

The agreed facts show that City Beach received several early warning signs before senior management became aware of the issue. In May 2022, a supplier emailed a senior buying team member saying City Beach may be aware of new compliance regulations regarding button cell batteries, identifying products that would not be compliant, directing City Beach to remove stock from sale, quarantine it and or apply warning labels, and linking to ACCC product safety information. In June 2022, another supplier emailed a junior buying team member about a product that was non-compliant with the Information Standard and asked City Beach to confirm stock levels so warning labels could be provided.

The relevant buying team members replied and sought to deal with the identified products. But they did not escalate the issue to senior management and did not take broader action to ensure ongoing compliance with the mandatory standards. That pattern repeated when regulators contacted stores and employees. NSW Fair Trading issued formal warnings in September and December 2022. Queensland Fair Trading later raised another issue in October 2023 and suggested City Beach check all other products containing button batteries. Local action was taken in some instances, such as removing stock from a store, but the Court recorded repeated failures to escalate the issue properly or build a business-wide compliance response.

The Court also recorded that before 30 August 2023 City Beach had no internal processes, procedures or systems designed to ensure compliance with the mandatory standards. It did not keep records that would identify whether products ordered by the buying team had or may have had button batteries. It had no safeguards to prevent sale of non-compliant button battery products, no procedures to escalate regulatory notices to senior management, no staff training on the standards, and no policies or internal guidance on them. Senior management held the incorrect belief that compliance with safety standards for consumer goods lay with the manufacturer.

For business owners, this part of the case is as important as the final penalty figure. The Court's reasoning was grounded not only in the existence of non-compliant products, but also in the absence of systems that should have identified, escalated and controlled the risk much earlier.

The main issue before the Court was penalty, not liability. City Beach admitted contraventions of the Australian Consumer Law by supplying products that did not comply with the Consumer Goods (Products Containing Button/Coin Batteries) Safety Standard 2020 and the Consumer Goods (Products Containing Button/Coin Batteries) Information Standard 2020, and by offering those products for supply. The Court therefore had to determine the appropriate pecuniary penalty and related orders in light of the scale and duration of the admitted conduct, the serious child safety risk, City Beach's internal management failures, its ignorance of its own legal obligations, and the remediation steps it later took.

The case also illustrates the legal effect of mandatory standards. Where a product is covered by a mandatory safety or information standard, supplying or offering it for supply in a non-compliant form can itself amount to a contravention. The Court's synopsis expressly referred to admitted supply of products that failed to comply with the standards, inadequate internal management systems, ignorance of legal obligations, and sale of products posing a high risk to the safety of children.

The Court made declarations recording the admitted contraventions. During the period from 22 June 2022 to 24 October 2024, City Beach supplied non-compliant products on 54,819 occasions in breach of the Safety Standard and on 56,974 occasions in breach of the Information Standard. The Court also declared that City Beach offered for supply, in physical stores and or online, 63 unique products that did not comply with the Safety Standard and 67 unique products that did not comply with the Information Standard.

On 22 December 2025, the Court ordered City Beach to pay a pecuniary penalty of $14,000,000 within 30 days and to pay the ACCC's costs. Earlier, on 9 December 2025, the Court had also made injunctive and corrective orders. For three years, City Beach was restrained from supplying products that were non-compliant with the Safety Standard or Information Standard and from offering such products for supply in physical or online stores.

The Court also required City Beach, at its own expense for three years, to arrange an annual review of its ACL compliance program by a qualified independent compliance professional. Within one month after each annual review, that professional must write to the ACCC identifying any required changes to City Beach's ACL compliance program and confirming they have been made. In addition, City Beach had to cause its legal advisers to provide an annual educational seminar to all employees and directors specifically dealing with compliance with mandatory safety standards under the ACL, including changes in the previous 12 months and ways to ensure ongoing compliance.

The Court further required City Beach to advertise commercially the recall of 68 products via Facebook, Instagram and any other social media channels on which it advertised as at the date of the order. The campaign had to include specified recall text, feature a clear image depicting at least one product from each of five categories of non-compliant products, and continue until the later of six months from the order or 2 million impressions.

Several features of the factual record help explain why the Court imposed a substantial penalty. First, the products created a serious child safety risk. The Court recorded that if swallowed or inserted, a button battery may lodge in a child's throat and cause serious injury or death, and that children up to the age of five are at greatest risk. Although there were no reported injuries, the parties agreed there was a real risk of harm, and the Court recorded that more than 50,000 young children were put at risk of severe injury or death.

Second, the conduct was extensive and prolonged. The admitted supplies ran from 22 June 2022 to 24 October 2024 and involved very large numbers of transactions. Third, the business had multiple opportunities to identify and address the issue earlier. Supplier emails in May and June 2022 referred directly to the new requirements and remediation steps. Regulator warnings followed. Yet the issue was not properly escalated to senior management until the ACCC contacted head office on 30 August 2023.

Fourth, the Court recorded systemic compliance weaknesses. There were no internal processes, no useful product records for identifying button battery goods, no safeguards to prevent sales of non-compliant products, no escalation procedures for regulatory notices, and no staff training on the standards. Fifth, even after City Beach began remediation and commenced a voluntary recall, further non-compliant products were identified and further sales still occurred. The Court recorded both store-level failures to follow directions and a software error that partially nullified a point-of-sale block. A later sale in August 2025 was attributed to a system update removing the block without the block being re-checked for all non-compliant products.

For businesses, this shows that penalty exposure is shaped not only by the existence of non-compliant products, but also by what the business knew, what warnings it received, how it escalated them, and whether its controls actually worked in practice.

Businesses should read this case as a practical warning about ownership of compliance. If you sell regulated consumer goods, especially goods sourced from third parties, you need a system that identifies which products are covered by mandatory standards and verifies compliance before sale. A general assumption that reputable suppliers have handled the issue is not enough.

The case also shows that compliance is operational. It sits across procurement, product onboarding, packaging review, online listing approval, store execution, customer communications and recall management. A business does not need a large legal department to manage this, but it does need clear accountability, documented procedures and records that allow affected products to be identified quickly.

Another practical lesson is that remediation must be tested. City Beach issued directions to stores, implemented a systems block and commenced a recall, but later sales still occurred. That means businesses should not stop at issuing instructions. They should verify that stock has actually been quarantined, online listings have actually been removed, point-of-sale blocks are actually active, and software updates have not undone those controls.

Finally, the case shows the importance of escalation. Supplier emails and regulator notices should not remain with a buyer or a store manager. They should trigger immediate review by the people who can stop sales, assess legal exposure and coordinate a business-wide response.

The Court recorded the key content of the mandatory standards at a high level. The Safety Standard required that a button battery in a consumer good must not release during reasonably foreseeable use or misuse conditions, and that a replaceable battery compartment must be designed to be resistant to being opened by young children. The Information Standard required prescribed warnings on instructions, packages, and stickers or tags.

For a business owner, the practical reading is that compliance needs to be checked at more than one point. It is not only about the product itself. It is also about packaging, instructions, labels, store presentation, online listings and the records that let you identify affected stock. If a product category is covered by a mandatory standard, the business should know that before the product goes live for sale.

The facts also show the importance of historical records. City Beach later said it had difficulty identifying some discontinued products because internal reporting did not accurately show whether previously offered products contained or may have contained button batteries. That is a reminder to keep product data in a way that remains searchable even after a product is discontinued.

Was this only about products already known to be dangerous? No. The Court recorded no reported injuries or actual harm, but accepted that the products created a real risk of severe injury or death to young children. That means businesses should not wait for an incident before acting.

Did City Beach's later cooperation avoid penalty? The Court still imposed a $14 million penalty. The published reasons clearly show that City Beach later reviewed products, worked with the ACCC and commenced a voluntary recall, but the admitted contraventions and compliance failures remained serious.

Does this only matter if you manufacture the goods? No. The respondent was a retailer sourcing products from third parties. The declarations and orders were based on the retailer's own supply and offer-for-supply conduct.

What should trigger immediate escalation inside a business? Supplier emails about non-compliance, regulator warnings, store inspection findings, customer safety complaints, and any sign that a product may contain a regulated component such as a button battery should all trigger immediate review.

What is the practical risk after a recall starts? This case shows that the risk does not end when a recall is announced. Businesses still need to verify that stock has been removed, online listings are blocked, point-of-sale controls remain active, and system updates have not undone those controls.

This case note is based on the Federal Court's published reasons and orders in Australian Competition and Consumer Commission v Fewstone Pty Ltd (Penalty) [2025] FCA 1636. The published material clearly states the admitted contraventions, the key factual background, the dates of the orders, and the penalty and compliance orders made.

The published reasons available for this page are truncated near the end. Because of that, this summary focuses on the parts of the Court's reasoning and factual record that are expressly stated. It should be read as a careful public explainer of the decision rather than a line-by-line account of every aspect of the Court's penalty analysis.