Veteran retailer Dimmeys Stores Pty Ltd has incurred penalties totalling $400,000 after the Federal Court in Melbourne found that the company had ignored product safety standards.
According to a report by the Australian Competition and Consumer Commission (ACCC), Dimmeys was caught out supplying children's dressing gowns which failed to comply with the mandatory consumer product safety standard for children's nightwear. The breach was detected by an ACCC staff member during a regular product safety survey exercise.
The ACCC enforces a mandatory standard for the labelling of children's nightwear which is designed to reduce the risk of burn injuries to children by providing specific information on the fire hazard of relevant garments.
In May and June 2010, Dimmeys allegedly sold children's dressing gowns which did not carry any fire hazard warning label as required by the standard and, according to the ACCC, the retailer then sold dressing gowns which did not have their fire hazard warning label attached in the correct position (in accordance with the standard), between the period of April 2009 and August 2010.
Australian Consumer Law amendments, which came into play on 15 April 2010, allow the ACCC to seek civil proceedings penalties for breaches of various consumer protection provisions of the Competition and Consumer Act 2010. This includes a section relating to prescribed consumer product safety standards. Penalties of up to $1.1 million can be sought against corporations and $220 000 against individuals.
Australian Competition and Consumer Commission chairman Graeme Samuel said the Dimmeys case was an important victory for the ACCC.
"This outcome is significant because it is the first civil penalty handed down for a breach of a product safety standard," he said.
"The children's nightwear standard is extremely important because it concerns the safety of young children," Samuel said. "Partial compliance is not an option for suppliers."
Samuel also said this is not the first time Dimmeys has landed in hot water for infringements of this kind.
"It is concerning that this action follows fines imposed on Dimmeys for previous breaches of product safety standards," he said.
"In 2001 Dimmeys was fined $160,000 for breaches in relation to selling children's nightwear that did not comply with the standard. In 1999 Dimmeys was fined $60,000 for product safety breaches in relation to the sale of children's bicycles."
In addition to the $400,000 fine, Justice Gordon the court also declared that Dimmey be restrained for a period of five years from supplying children's nightwear which does not comply with the standard, implement a trade practices compliance program, and pay the ACCC's agreed costs of $60,000.
Dimmeys has since recalled the dressing gowns and agreed to all orders sought by the ACCC, other than the amount of the penalty.
Other retailers to have had run ins with the ACCC over similar issues in the past, include Fossil Retail Stores (Australia) Pty Ltd, Paris Miki Australia Pty Limited and J.L. Footwear Pty Ltd (licensee of the Nine West store brand).