ACCC issues product safety warning to small firms

The competition watchdog is reminding small businesses to review its mandatory reporting regime regarding product safety, which has triggered 40 product recalls in six months.

The Australian Competition and Consumer Commission, which introduced the regime at the start of 2011, received more than 900 mandatory reports during the first six months of the year.

The intelligence provided by these reports, and the ACCC’s product safety data clearinghouse, triggered 40 recalls during this period.

The ACCC is using the figures as an opportunity to remind businesses they are required to notify the watchdog within two days if they become aware that a product they have supplied has caused – or may have caused – serious injury, illness or death.

The laws apply to anyone in the business of selling, exchanging, leasing, hiring or hire-purchasing of goods, or the granting or conferring of product-related services such as repair or installation.

In light of the figures, ACCC deputy chair Peter Kell believes many small businesses may be unaware of the regime or are simply choosing to ignore it.

“As the majority of these reports have come from large organisations, the ACCC is concerned that small- and medium-sized enterprises may not yet be fulfilling their mandatory requirements,” Kell said in a statement.

The ACCC received mandatory reports covering a range of product categories, from food and groceries to children’s products, cosmetics and motor vehicles.

According to the ACCC, approximately 40% of the reports came from retailers, 40% from manufacturers and 20% percent from other suppliers.

Almost 500 of the 911 reports were, or are, currently being assessed by the ACCC, and 430 were referred to other regulators.

“It’s important for suppliers to remember that the law makes it clear that a mandatory report is not an admission of liability, and an ACCC assessment will only lead to a product recall when it is necessary to protect consumers,” Kell said.

The ACCC confirmed there are strict confidentiality requirements around mandatory reports, which means details of recalls triggered by mandatory reporting cannot be released.

However, the ACCC can confirm that the products were associated with anaphylactic and allergic reactions, burns, electrocution, choking hazards, cuts and lacerations.

One of the most recent examples is Dimmeys Stores, which was hit with a $400,000 fine for supplying children’s dressing gowns that failed to comply with the mandatory consumer product safety standard for children’s nightwear.

“This outcome is significant because it is the first civil penalty handed down for a breach of a product safety standard,” ACCC former chairman Graeme Samuel said at the time.

“This case sends a strong message to all suppliers that they risk substantial penalties if they supply products which do not comply with prescribed product safety standards.”