Family Dollar fined $41.7 million for rodent-infested warehouse

Value chain Family Dollar has been fined $41.7 million, the largest financial penalty in a single food safety case, for distributing food, drugs, medical devices and cosmetics from a rat-infested warehouse, the US Department of Justice said.

On Tuesday, Family Dollar pleaded guilty in federal court in Little Rock, Ark., to one misdemeanor count of keeping products in unsanitary conditions, causing them to become adulterated. According to the plea agreement, the $41.675 million fine is assessed on the value of the products that were contaminated when they were stored in unsanitary conditions.

The distribution center in West Memphis, Ark., served 404 Family Dollar stores in six states: Alabama, Missouri, Mississippi, Louisiana, Arkansas and Tennessee, according to court documents.

Family Dollar is a subsidiary of Dollar Tree, a fast-growing retail giant that operates more than 16,000 stores across the United States and Canada.

Family Dollar has temporarily closed stores in 2022 due to the contagion. The stores were closed for several weeks but have since reopened, a Dollar Tree spokeswoman said in an email.

The rats “established a presence” at the warehouse in July 2021, according to the plea agreement. Rats used an abandoned transport system to run freely through the facility.

The employee filed a complaint with the Occupational Safety and Health Administration, and in August 2021, one of the company’s regional compliance specialists said the rodent problem was “highly noticeable.”

In 2022, Food and Drug Administration inspectors observed “live rodents, dead rodents in various states of decay, rodent droppings and urine, and rodent bite, nesting, and odor marks throughout the facility, in addition to dead birds and bird droppings,” according to the plea agreement. guilt in the case.

“It is unfathomable that Family Dollar knew of rodent and pest problems at its Arkansas distribution center but continued to ship products that were unsafe and” unsanitary, Jonathan D. Ross, U.S. Attorney for the Eastern District of Arkansas, said in a statement. . “Knowingly selling these types of products not only endangers the public’s health, but undermines consumer confidence in the products they buy.”

As many as 1,270 rodents were exterminated when the warehouse was fumigated in January 2022, federal officials said.

On February 18, 2022, the company voluntarily recalled all drugs, medical devices, cosmetics, and human and animal food products sold since January 1, 2021 in 404 stores served by the infected warehouse, the Department of Justice said. .

The plea agreement reached Tuesday requires Family Dollar and Dollar Tree to meet “robust” corporate and reporting requirements for the next three years. If the company does not meet the requirements, that deadline could be extended.

Dollar Tree said in a statement that it has “significantly improved” its compliance and security programs by hiring experienced staff, providing security training and satisfying third-party audits.

Rick Dreiling, president and chief executive officer of Dollar Tree and a member of its board of directors since March 2022, said the company has “worked diligently to help Family Dollar resolve this historic issue and significantly improve our policies, procedures and physical facilities to make sure it doesn’t happen again.”

Before the Family Dollar case, the Mexican restaurant chain Chipotle was handed the largest fine in a food safety case when ordered to pay $25 million for its role in a foodborne illness outbreak that sickened more than 1,100 people between 2015 and 2018.

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