An Auckland-based product liability insurer is being sued over faulty polythylene caps that allegedly contaminated the garlic pastes of an Australian food manufacturer.

Melbourne-based Australian Gourmet Pastes Pty. Ltd. (AGP) has alleged that its garlic pastes were contaminated due to faulty polyethylene closures supplied by Endeavour Packaging Pty Ltd, a private company headquartered in Sydney.

Endeavour’s insurer, IAG New Zealand Ltd, is being brought to court for damages of $363,764, after an Australian appeal court reversed an earlier judgment to hold the proceedings in New Zealand, Plastics News reported.

AGP alleged that many of the PE caps and tamper-proof closures supplied by Endeavour in 2011 and 2012 caused their garlic pastes to become discoloured because it did not maintain an airtight seal. This led the company to suffer losses after it pulled out its products from Australia’s two major supermarket chains around the nation.

An analysis of the seals found that they were PE only “without any polar groups present to assist adhesion.”

IAG has denied liability, arguing that the claim is not covered by the policy because Endeavour supplied defectively designed seals.

No court date has been set, the report said.


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