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.

Button batteries are dangerous and pose a significant risk to young children if swallowed or inserted. Three children have died in button battery incidents in Australia.

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.”

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...”