Australians have died choking on mouth-sized jelly cups containing Konjac as the additive stops the jelly dissolving. The government outlawed the products in 2004.
NSW Fair Trading carried out snap inspections of three businesses on July 10, and 11,300 of the hazardous confectionery.
The organisation had been tipped off by the Australian Competition and Consumer Commission (ACCC) about two suppliers in Wetherill Park and Wentworth Point receiving a shipment of the product.
The discovery was made by the ACCC after a customer reported spotting the product at a third location in Banksmeadow.
Three Sydney businesses were ordered to stop selling the jelly cups and destroy their stock. (HANDOUT/NSW GOVERNMENT)
All three businesses were ordered to stop sales, destroy their stock and submit voluntary recall for products that may have been sold.
Only one packet had been sold and was returned before being destroyed while NSW Fair Trading oversaw the destruction of the remaining thousands of cups.
The organisation's commissioner Natasha Mann said the operation was a warning to businesses that action will be taken.
"It just takes one of these mini jelly cups to lead to an irreversible tragedy."
Firms in Australia risk hefty fines for importing or supplying the banned products: up to $50 million for corporations or $2.5 million for individuals.
Ms Mann said that consumers who are worried about purchased mini jelly products should read the packaging and throw them out if they are unsure if konjac is an ingredient.
Konjac is not banned on its own, only in jelly cups that have a height or width of less than or equal to 45mm.
The ingredient also goes by the name konnyaku, conjac, glucomannan, taro flour/power or yam flour/powder.
A three-year-old boy from Sydney died after eating a cup in 2000, a two-year-old in Queeensland had almost choked to death the year before.
A government statement noted in 2002 that the confectionery was a problem across the world with eight deaths in Japan, five in the United States and one in the UK.
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