News & Insights

After an eighteen-month transition, the mandatory safety standards for button batteries are now being enforced by the ACCC. Well-known retailers, Dusk and The Reject Shop, have been the first to be subject to the ACCC’s investigation in relation to the new button battery safety standards.

The background on button batteries

Button batteries are extremely dangerous for young children and became the focus of the ACCC in 2022, where changes were implemented to button battery safety standards to help reduce the risks of button batteries in consumer goods. The ACCC provided businesses with an eighteen-month transition period to implement the mandatory safety standards and comply with the changes.

Button battery safety and compliance is one of the ACCC’s 2023 – 2024 specific enforcement priorities and safety for children enforcement priority. To achieve its objectives, the ACCC:

• encourages compliance with the law by educating and informing consumers and traders;
• enforces the laws;
• undertakes market studies to identify market failures and how to address them; and
• works with other agencies to implement these strategies.

The ACCC has recently published two of its findings against major retailers.

What happened?

For Halloween 2022, Dusk and the Reject Shop released novelty-themed products which required the use of button batteries.

Dusk and the Reject Shop both failed to test their novelty-themed products in accordance with the mandatory safety standards to confirm that the products were safe prior to selling them.

The safety standards require products containing button batteries to have a secure battery compartment to prevent children gaining access to the button batteries. The products must also have child-resistant packaging, and appropriate warning and emergency advice with the packaging and instructions.

The ACCC found that the novelty-themed products in both retailers appealed to children, given that they were Halloween themed, and therefore had the potential to cause significant harm, or even death, if the products did not meet the mandatory safety standards.

Dusk had a sample of its products inspected by the ACCC, which had strong concerns that the button battery compartments were not secure and may not have complied with the mandatory safety standards, even if they were tested. Dusk also failed to include the appropriate safety warning and information required by the mandatory safety standards. Dusk was required to pay penalties of $106,560 and enter an undertaking with the ACCC.

The ACCC also tested The Reject Shop products that had not undergone the required testing, which were found to comply with the relevant mandatory safety standards. However, it was noted that failing to test the products prior to selling them was unacceptable and posed a serious risk of injury or death for young children. The Reject Shop was required to pay penalties of $133,200, as well as make a commitment to the ACCC to strengthen existing compliance procedures and provide further training for staff.

Why the difference in penalties between Dusk and The Reject Shop?

• The sum of the penalties imposed took both of the following into consideration:
• whether the companies were listed or unlisted – Dusk is unlisted (so subject to infringement notice penalties fixed at $13,320 each), and The Reject Shop is listed (so subject to infringement notice penalties fixed at $133,200 each); and
• the number of infringements identified – Dusk paid 8 x infringement notices and The Reject Shop paid 1 x infringement notice.

How can businesses avoid these types of penalties?

Manufacturers, importers, wholesalers and retailers of button batteries, or consumer goods that contain button batteries supplied to Australia, must comply with the mandatory safety standards released by the ACCC.

The safety standards ensure businesses that have products containing button batteries:

• have a secure button battery compartment that is resistant to being opened by young children;
• must ensure the button battery is secure and not able to be released during reasonably foreseeable use or misuse;
• must undertake compliance testing to demonstrate that the safety requirements have been met; and
• must place mandated warnings on the packaging and in accompanying instructions.

These safety standards must be complied with to avoid the risk of penalties.

Aside from the published investigations and fines, we know (from personal experience assisting our clients with these very matters), the ACCC is certainly making enquiries of other businesses, and taking button battery safety seriously. It is likely there will be more to come as a result of these enquiries, so businesses need to ensure they stay in front of the mandatory safety standards.

Key Takeaways

1. Button batteries are extremely dangerous and pose serious risk of injury or death to young children.
2. If you supply consumer goods containing button batteries make sure the mandatory safety standards have been complied with.
3. In order to fulfil the mandatory safety standards, the products must be tested – prior to sale.

For further information or a review of your compliance with the button battery mandatory safety standards, please contact Macpherson Kelley’s experts.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.