ACCC takes retail giant to court over alleged dangerous products

The ACCC alleged that Kmart breached consumer safety laws in relation to cosmetic nail glue and button battery products.

It’s not the first in recent times that the retail giant was in the Federal Court, as last year Australian Uyghur launched a landmark Federal Court action seeking to determine whether Kmart misled consumers about ethical sourcing practices amid concerns that its clothing supply chains may be linked to forced labour in China’s Xinjiang region.

ACCC deputy chair Catriona Lowe spoke on the allegations being put forward, noting serious compliance failures as the prominent reason for the case.

“Kmart sold millions of units of some of these products, each posing a potential danger to consumers, including young children,” Lowe said.

“We will allege Kmart’s conduct showed serious compliance failures which exposed the public to a significant risk of product safety harm.

“Button batteries are potentially deadly to young children if swallowed or inserted.

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“We expect all businesses, especially large retailers like Kmart, to have consumer safety front of mind.”

The ACCC is seeking penalties, declarations, costs and other orders.

Allegations regarding OXX fingernail glue

In a statement, the ACCC highlighted that Kmart sold cosmetic nail glue, which has the potential to cause burns to human skin when it comes into contact with fabric.

According to allegations, Kmart engaged in false and misleading conduct by offering the cosmetic nail glue for sale without cautioning consumers about burn hazards, despite having received consumer reports that made the company aware of these safety risks.

At least 51 consumers had made concerns over burn injuries inflicted by Kmart products between August 2017 and December 2024.

Cases included severe injuries such as burns requiring medical treatment, leading to hospitalisation and skin grafts.

33 of the reports related to injuries with fabric, with some customers reporting chemical reactions or smoke whilst utilising the nail glue.

In December 2024, Kmart added a safety warning to the fingernail glue product, regarding the risk of burns when in contact with fabric.

“We consider that Kmart’s failure to warn consumers of the risk of burns after receiving numerous consumer reports of burn injuries associated with the use of the nail glue exposed consumers to an ongoing risk of serious injury, as an incredibly serious matter,” Lowe said.

“It was important for Kmart to address this, once it was made aware of these serious product safety concerns.”

Allegations regarding button batteries & smart tags

The ACCC alleged that Kmart did not test two models of an Anko kids’ digital watch and seven models of analogue watches prior to supply, which is a requirement by mandatory button battery standards.

Under mandatory button battery safety standards, suppliers must test all button battery–powered items for compliant safety features prior to offering them to consumers.

According to the ACCC, Kmart distributed approximately 64,000 non-compliant watches - spanning two models of Anko children's digital watches and seven analogue watch models - between June 2022 and November 2024 without completing the required pre-supply testing.

“These watches contained button batteries, but Kmart did not test them prior to supply to show that young children could not open the battery compartments,” Lowe said.

“This is despite many of the watches being specifically designed for children.”

Furthermore, the ACCC claims Kmart distributed over 800 Anko Smart Tags that failed to meet mandatory button battery information standards.

Although basic safety warnings were present on these GPS tracking devices, they omitted several mandatory disclosures, leading Kmart to recall the Smart Tags in 2024 following ACCC intervention.