Federal Court upholds $14m penalty in ACCC case against City Beach

The Federal Court has today dismissed an appeal by retailer Fewstone Pty Ltd, trading as City Beach, against a $14 million penalty for selling non-compliant button battery products, in proceedings brought by the ACCC.

The non-compliant products, many of which were marketed to or intended for children, included toys, digital notepads, keyrings, lights and light-up Jibbitz accessories for Crocs shoes.

“The Court has today confirmed that a significant penalty is appropriate in this case to deter City Beach and other traders from failing to comply with the mandatory button battery standards,” ACCC Commissioner Luke Woodward said.

“This highlights the importance of businesses implementing systems to ensure they are complying with the button battery standards, which are intended to protect the safety of children.”

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ACCC rejects City Beach appeal on button battery products

The case has been ongoing until the final decision today.

In December 2025, the trial judge found that between June 2022 and October 2024, City Beach sold more than 60 product types containing button batteries (on over 54,000 occasions) that did not comply with the button battery safety and/or information standards, and imposed a penalty of $14 million. 

City Beach had admitted this conduct breached the Australian Consumer Law.

The Full Federal Court has now dismissed City Beach’s appeal that the $14 million penalty was manifestly excessive.

The Full Court today said: “The sale of a very dangerous but very cheap product contravening a safety standard may be a paradigm example of a circumstance where the appropriate penalty may bear no relevant relationship to the profit… because of the heightened need to deter corporations from ever selling such a product, or from failing to have systems and processes in place...”

As a result of today’s decision, the $14 million penalty order made in December, which was the first of its kind for breaches of the mandatory button battery standards, will remain in effect.

“The ACCC will continue to take strong enforcement action where appropriate against businesses which fail to comply with the mandatory button battery safety standards,” Mr Woodward said.

“Businesses are on notice that they must take button battery safety seriously and implement effective systems to ensure compliance with the mandatory standards, or they will risk substantial penalties for non-compliance."

Response from City Beach

City beach has posted a statement on its website. It reads in full:

"Statement to Our Customers – Product Recall Involving Button-Battery Items

To our valued City Beach community,

We regret to inform you that City Beach initiated voluntary recalls for five categories of products that contain button batteries:
Novelty Products
Keyrings
Novelty Lighting Products
Crocs Jibbitz
Digital Notepads

Nothing is more important to us than the safety and trust of the people who shop with us. We recognise that button batteries can pose serious risks, especially to young children, if they become accessible or are swallowed. We are deeply sorry for any worry or inconvenience this situation may cause you and your family.

What we are doing:

• We have removed the affected products from sale and are working closely with the authorities and our suppliers to ensure full compliance with all safety requirements.
• We implemented a voluntary recall of the affected products on 11 March 2024.
  We are providing clear instructions for returns, refunds and safe disposal of the recalled items.
• We are improving our product-safety checks and supplier oversight so that there is no recurrence of this or any similar issue.

What we ask of you
If you purchased any of the products listed above during the specified period, please stop using them immediately and follow the return or refund steps outlined below on our dedicated recalls page.

Your next steps are simple: locate your item, visit the recalls link, and follow the instructions for a free return or refund. Our customer-service team is ready to help with any questions or concerns.

Moving forward
We know that an apology alone is not enough. We are committed to earning back your confidence through transparent communication, strengthened safety processes and continuous monitoring of every product we sell. 

We want our customers to feel secure in the knowledge that all care has been taken to ensure the quality and safety of the items we sell.

Thank you for your understanding and for allowing us the opportunity to make this right. We regret that these issues ever happened within our company because we strive to put our customers’ safety first. 

If you need assistance, please reach out via the contact information provided below, or speak to any of our in-store team members."