August 14, 2009 / 6:52 PM / 9 years ago

Alberto Culver accuses P&G of defective Noxzema

* Alberto bought rights to Noxzema brand from P&G

* Claims P&G manufactured defective product

* Says product defects constitute breach of contract

CHICAGO, Aug 14 (Reuters) - Alberto Culver Co (ACV.N) has sued Procter & Gamble Co (PG.N), accusing the household products maker of producing some defective Noxzema skin cream after it sold the line to Alberto last year.

P&G kept making the products under a transitional period after Alberto bought the rights to the Noxzema brand in October.

According to a copy of a court document, Alberto argues that it overpaid when it paid $81 million for the Noxzema brand and incurred significant costs addressing the defect issues.

P&G declined to comment on Friday while Alberto was not immediately available.

The case was filed Aug. 12 in Cook County Circuit Court in Illinois.

According to the document, Alberto became aware of a higher number of consumer complaints than usual regarding Noxzema products in March, leading the company to investigate. It found that about 20 percent of the original Noxzema products at its distribution centers were defective.

“The defects were visually obvious ... the defective products display unappealing characteristics: standing liquid with clumps of cream similar to cottage cheese, grains or shards throughout, and/or a dull and cracked surface,” Alberto said in the lawsuit.

The defect was most likely caused by violations such as heating products too long during the manufacturing process at a P&G plant in Puerto Rico, Alberto said.

The company also claims that P&G did not test the finished product before shipping it, which constitutes a breach of the parties’ contract.

Alberto bought the worldwide rights and trademarks to the Noxzema skin care brand in October. The deal included business in the United States, Canada and parts of Latin America, while P&G kept its Noxzema business in parts of Western Europe.

The case is Alberto Culver USA Inc vs Noxell Corp and Procter & Gamble Co, case number 2009-L-009543.

Reporting by Jessica Wohl; Editing Bernard Orr

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