Court presses the button [battery] on $14m penalty for City Beach

In late 2025, the Federal Court delivered a landmark decision ordering Fewstone Pty Ltd, trading as City Beach, to pay $14 million in penalties for breaches of mandatory button battery safety and information standards.

The ACCC has previously issued infringement notices and exercised its enforcement powers to require improvements to compliance programs, but this is the first Federal Court judgment issuing a penalty for non-compliance with these critical safety standards. Consistent with the ACCC's product safety priorities, and significant increases to maximum penalties for breach of the Australian Consumer Law (ACL) in recent years, the decision underscores the seriousness of these obligations, particularly where public safety – especially the safety of infants and young children – may be at risk.

Watch this space: On 10 February 2026, City Beach filed a Notice of Appeal in the Federal Court. We will continue to monitor and report updates.

Products supplied in breach of Button Battery Standards

The case relates to City Beach’s supply of a range of products containing button/coin batteries, including toys, digital notepads, keyrings, lights, and other light-up accessories, that failed to meet:

• the Consumer Goods (Products Containing Button/Coin Batteries) Safety Standard 2020; and

• the Consumer Goods (Products Containing Button/Coin Batteries) Information Standard 2020.

City Beach admitted to contraventions of the ACL in a Statement of Agreed Facts and Admissions filed on 11 July 2025. The Federal Court found that, over a two-year period from 22 June 2022 (when the mandatory standards took effect) to 24 October 2024, the company had committed significant breaches of the ACL, including:

1. Supply Contraventions:

• 54,819 occasions of supply in breach of section 106(1) (Safety Standard).

  • 56,974 occasions of supply in breach of section 136(1) (Information Standard).

2. Offer for Supply Contraventions:

• On each occasion that City Beach offered non-compliant products for supply, it contravened sections 106(2) and 136(2).

  • City Beach offered for supply, in a physical store 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.

Court's key findings on the ACL breaches

The judgment contributes to the principles which are applied to determine penalties for breaches of the ACL. The Court (Justice Downes) addressed principles of deterrence, maximum (calculable) penalty, the course of conduct principle, and the totality principle (treating multiple contraventions as attracting one penalty).

The Court noted that the ACCC did not seek findings of additional “offer for supply” occasions beyond those associated with products that were actually sold. As a result, the offer for supply contraventions were treated as coextensive with the supply contraventions, and no separate penalties were imposed for those counts.

The Court imposed a single penalty of $14 million across all contraventions, making the following key observations:

• The contraventions were extensive, occurring over a prolonged period and involving a large number of products.

• The theoretical maximum penalty for the breaches was in the hundreds of billions of dollars, which the Court deemed practically meaningless. However, the increase in maximum penalties during the period of non-compliance highlighted the legislative intent to impose significant penalties for breaches of mandatory safety standards.

• The contraventions created a serious risk of harm to children, including the risk of death or physical injury from swallowing button batteries. The Court noted that the absence of evidence of actual harm did not diminish the severity of the risk.

• City Beach’s revenue and profit from the sale of non-compliant products were relatively small, totalling $542,314 in revenue and $34,368 in direct profit up to 30 June 2024.

• The company’s senior management was unaware of the mandatory standards, a fact the Court described as "astonishing" given the well-publicised dangers of button batteries and the ACCC’s efforts to raise awareness.

• Despite being informed of its non-compliance, City Beach delayed taking action to recall the affected products.

• The company admitted to the contraventions and expressed regret, but the Court found that its culture of compliance remained a concern.

Penalty and orders

The ACCC had sought a penalty of $14 million, while City Beach argued for a penalty of $3.15 million. The Court ultimately agreed with the ACCC's submission, citing:

• the need for general deterrence to prevent similar breaches by other companies;

• the significant risk posed to children by the non-compliant products;

• the extensive nature of the contraventions over a two-year period;

• aggravating factors, including the lack of effective compliance systems, failure to escalate issues to senior management, and continued sale of non-compliant products even after being warned by regulators; and

• the need for specific deterrence, given City Beach’s ongoing compliance issues.

In addition to the $14 million penalty, the Court imposed several other orders on City Beach:

• An injunction preventing the company from supplying or offering non-compliant products for a period of three years.

• A requirement for City Beach to fund an annual review of its compliance program and provide annual educational seminars for its employees and directors on compliance with mandatory safety standards under the ACL.

• A directive to undertake commercial advertising on social media platforms, including Facebook and Instagram, to inform the public about the recall of 68 named products.

Previous enforcement action for Button Battery Standards

Note: Many of these companies were also required to take other action, such as improvements to their product compliance programs and court enforceable undertakings.

Thanks to Lucy Percival, Summer Clerk, for her help in preparing this article.