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Family Dollar Stores was this week ordered to pay $41.6 million for using a rodent-infested warehouse to distribute food, cosmetics and medical devices to more than 400 stores across the South.
The largest criminal penalty of its kind comes after an a U.S. Food and Drugs Administration investigation found “live rodents, dead and decaying rodents, rodent feces, urine, and odors, and evidence of gnawing and nesting,” at the company’s distribution center in West Memphis, Arkansas, the Department of Justice said in a statement.
The company — which has 8,000 stores across 46 states and was bought by rival Dollar Tree in 2015 — pleaded guilty to one misdemeanor count of causing goods to be “adulterated while being held under insanitary conditions,” at a federal court hearing in Little Rock on Monday,
The department said the fine was the largest ever in a food safety case in the U.S. As part of a plea agreement, both Family Dollar Stores and Dollar Tree must meet ” robust” corporate reporting guidelines for the next three years.
“When consumers go to the store, they have the right to expect that the food and drugs on the shelves have been kept in clean, uncontaminated conditions,” Acting Associate Attorney General Benjamin C. Mizer said in the statement.
The plea agreement said that in August 2020 the company first received reports of “mouse and pest issues,” although deliveries continued to 404 stores in Alabama, Missouri, Mississippi, Louisiana, Arkansas, and Tennessee. The company admitted that some employees were aware in January 2021 that the conditions at the warehouse were illegal.
Yet it continued shipping goods from the warehouse until January 2022 when the FDA’s investigation revealed the extent of the infestation. After the building was fumigated, exterminators found 1,270 dead mice, the DOJ said.
It wasn’t until Feb. 18, 2022, that all food, drugs, cosmetics and medical devices that came from the warehouse were recalled.
U.S. Attorney Jonathan D. Ross said: “It is incomprehensible that Family Dollar knew about the rodent and pest issues at its distribution center in Arkansas but continued to ship products that were unsafe and insanitary.”
“Knowingly selling these types of products not only places the public’s health at risk but erodes the trust consumers have in the products they purchase,” he continued.
Dollar Tree said it had fully cooperated with the DOJ’s investigation and was working to change its safety protocols.
“Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures and compliance initiatives,” Dollar Tree Chairman and CEO Rick Dreiling, who assumed his role in March 2022, said in a statement.
“Since that time and even more directly when I assumed the role of CEO, we have worked diligently to help Family Dollar resolve this historical matter and significantly enhance our policies, procedures, and physical facilities to ensure it is not repeated,” he said.
The company said it plans to return to the West Memphis site by Fall 2024, with a $100 million investment to improve the distribution, while creating 300 jobs.
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