“We are working with the regulator and will be guided by their direction on further actions,” said Chatime chief executive Carlos Antonius.

A spokesperson for the consumer regulator said businesses all along the supply chain for button batteries or products powered by them, including manufacturers, importers, distributors and retailers, had to comply with safety and information standards which could be found on the Product Safety Australia website.

“These standards include design requirements and safety warnings and information to be provided on the product and its packaging,” said an Australian Competition and Consumer Commission spokesperson.

“Businesses are responsible for addressing safety issues with products they sell to consumers, such as through honouring obligations under the consumer guarantee provisions, or conducting a voluntary recall, where applicable.”

This is not Chatime’s first issue with selling branded cups. The bubble tea chain was forced to stop selling reusable cups after KeepCup filed a lawsuit against it for using its trademarked name on packaging. The matter was settled for an undisclosed sum.

Over the coming fortnight, Chatime’s consumer product safety unit will determine whether the Light-Up Cup can continue to be sold — “which may include a sticker being placed onto the packaging to make them compliant” — or whether it has to do a complete recall of stock.

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That outcome would result in Chatime stores being “credited” for the return of the cups.

A 2019 investigation by this masthead revealed Chatime was covering up rampant underpayment of its workers, many of whom were international students. As far back as 2009, Chatime had underpaid workers by more than $10 million across its franchise network of 111 stores at the time. Antonius said all affected individuals had since been back-paid.

Chatime was founded in 2005 in Taiwan and is listed on the Taipei Exchange with more than 2500 stores around the world. The Australian business is co-leading a global review of the bubble tea chain’s brand.