Fantastic Furniture Pty Ltd, Spotlight Pty Ltd and Smash Enterprises Pty Ltd supplied bean bag covers which failed the mandatory labelling standard.
The Federal Court in Melbourne declared, by consent, that the traders contravened the Trade Practices Act 1974* by supplying the bean bag covers which were not affixed with the required choking hazard warning label.
Acting ACCC chairman Michael Schaper said the warning labels on bean bag products carry a very important consumer product safety message.
"The labels warn about the severe danger presented to children if the filling is swallowed or inhaled."
The court also imposed a civil penalty of $300,000 against Fantastic Furniture because it had supplied a significant number of the unlabelled bean bag covers on or after 15 April 2010. Prior to this date the ACCC could not seek penalties for such breaches.
In October 2008, Smash supplied more than 11,000 bean bags to Fantastic Furniture and Spotlight without the choking hazard warning label. Fantastic Furniture and Spotlight then supplied a significant number of those bean bag covers to consumers.
"The outcome sends a strong message to suppliers of products subject to mandatory product safety standards," Dr Schaper said. "Repeated breaches are likely to see you end up in court and exposed to substantial penalties."
Fantastic Furniture had previously provided the ACCC with court-enforceable undertakings in 2008 after it supplied bunk beds which did not comply with a mandatory product safety standard. At that time Fantastic Furniture undertook to ensure for 3 years that all products supplied by it that were subject to a prescribed product safety standard would comply with that standard.
Fantastic Furniture's breach of its undertaking was taken into account by the parties in agreeing to the proposed penalty of $300,000.
The court also granted injunctions restraining all three respondents from supplying bean bags covers that do not comply with a prescribed safety standard for a period of 5 years. In addition, Smash Enterprises and Spotlight were each ordered to establish, maintain and administer a trade practices compliance program for 3 years at their own expense.
In the past week in a separate court outcome, Dimmeys Stores Pty Ltd was penalised $400,000 for supplying children's dressing gowns which failed to comply with the mandatory consumer product safety standard for children's nightwear
For further information about the standards administered by the ACCC please visit www.productsafety.gov.au, call the ACCC Infocentre on 1300 302 502 or follow us on Twitter at www.twitter.com/ProductSafetyAU.
*On 1 January 2011 as part of Australian Consumer Law amendments the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010.
Mr Brent Rebecca, media unit (02) 6243 1317 or 0408 995 408
Release # NR 67/11
ACCC Infocentre: 1300 302 502