Family Dollar Stores agreed to spend $41.6 million to store food, cosmetics, medications and medical equipment for years in a rat-infested warehouse in Arkansas, court records show.
The Dollar Tree-owned discount chain reached a settlement Monday in the Eastern District of Arkansas after being charged with a misdemeanor count of disparaging FDA-regulated products by storing them in unsanitary conditions, according to court documents.
In accepting the plea, the company admitted to shipping products through January 2022 from its distribution center in Arkansas, where the FDA found evidence of live, dead and decaying rodents, rodent feces, urine, odors and evidence of gnawing and nesting, according to court documents .
Fumigation of the facility resulted in the eradication of 1,270 rodents, according to court documents.
“Having reached a complete resolution with the DOJ, we continue to advance our business transformation, security practices and compliance initiatives,” Dollar Tree Chairman and CEO Rick Dreiling said in a news release Monday. “When I joined Dollar Tree's Board of Directors in March 2022, I was very disappointed to learn of these unacceptable issues at one of Family Dollar's facilities. Since then, and even more immediately when I took on the role of CEO, we have worked diligently to help Family Dollar resolve this historic issue and significantly improve our policies, procedures and physical facilities to ensure it does not happen again .”
Family Dollar employees knew about rodents
The FDA inspection did not occur until 2022, but select stores that received products from the Arkansas facility reported problems with mice and pests in shipments in August 2020, according to court documents. The inventory was delivered to more than 400 Family Dollar stores in Alabama, Missouri, Mississippi, Louisiana, Arkansas and Tennessee, the documents continued.
According to court documents, certain stores even reported receiving rodents and rodent-damaged products through shipments from the distribution center through the end of 2020.
Family Dollar also told the court that no later than January 2021, some of its employees knew about conditions in the warehouse that caused products to become even more contaminated, court documents show.
“Consumers trust that products purchased at retail stores like Family Dollar are safe,” U.S. Attorney Jonathan D. Ross said in a Justice Department news release Monday. “It is incomprehensible that Family Dollar knew about the rodent and pest problems at its Arkansas distribution center but continued to ship products that were unsafe and unsanitary.
Family Dollar has voluntarily recalled products
All medications, medical devices, cosmetics, and human and animal foods sold since Jan. 1, 2021, at the 404 stores served by the Arkansas facility were voluntarily recalled by Family Dollar on Feb. 18, 2022, court documents show.
“There are numerous dangers associated with rodents, including the potential presence of Salmonella,” Family Dollar said in a news release dated Feb. 18, 2022. “Use or consumption of affected products may pose a risk of illness due to the potential presence of Salmonella.”
At the time of the recall, the company said it was “not aware of any consumer complaints or reports of illness” related to the bearing problems.
Dollar Tree said in its fourth-quarter earnings report in March 2022 that the product recall at Family Dollar stores related to the rodent infestation cost the company $34 million.
Family Dollar Recall: The rodent infestation, which closed 404 stores, cost the company $34 million
“Totally reimagined and refreshed” distribution center in Arkansas
Operations will return to West Memphis, Arkansas, when Family Dollar opens “a completely redesigned and updated distribution center,” Dollar Tree announced in its news release Monday.
According to the company, the new facility is expected to be operational in fall 2024 and will cost more than $100 million. The facility will also create more than 300 new jobs for workers in Arkansas, the company said.
The company, headquartered in Chesapeake, Virginia, also said the new distribution center “will be rebuilt with a strong focus on safety, sanitation and compliance and will serve as a model of excellence for all facilities in the Dollar Tree and Family Dollar network.”
According to data firm ScrapeHero, Family Dollar has more than 8,000 stores in 49 states and was purchased by Dollar Tree in 2015.