Family Dollar Stores pleaded guilty Monday to storing groceries, medicines, medical devices and cosmetics in a rat-infested distribution center and agreed to pay a $41.675 million fine, authorities said.
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The fine is “the largest ever fine in a food safety case,” the Justice Department said. Under the consent agreement, Family Dollar and its parent company Dollar Tree are also required to comply with the company's compliance and reporting requirements for the next three years.
“When consumers go to the store, they have a right to expect that the food and medicines on shelves are clean and uncontaminated,” Acting Assistant Attorney General Benjamin Mizer said in a statement. “When companies violate this trust and the laws protecting consumers, the public can rest assured: the Department of Justice will hold these companies accountable.”
According to the consent agreement, Family Dollar first received reports of “mouse and pest issues during store deliveries” in August 2020. The compromised distribution center in central Arkansas supplied FDA-regulated consumer products to more than 400 Family Dollar stores throughout Alabama, Missouri, Mississippi, Louisiana, Arkansas and Tennessee, according to the Department of Justice. Family Dollar also “admitted that some of its employees were aware of “adulterated” products due to unsanitary conditions no later than January 2021, but continued to ship the products to stores until January 2022 – both alive and dead during an FDA inspection Rodents and evidence of rodents found. In February 2022, the company finally recalled products from its over 400 stores.
“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 statement. “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.”
As part of its compliance efforts, Family Dollar has hired a new chief legal officer and chief ethics and compliance officer, according to Dollar Tree. Additionally, new procedures and controls were developed and implemented to provide compliance and security training to employees. Additionally, each of its distribution centers has undergone and passed an external audit in the last 18 months, the company said.
Family Dollar plans to open a new facility in West Memphis, Arkansas, which is expected to begin operations in the fall and will create more than 300 jobs, Dollar Tree said.
Dollar Tree shares fell less than 1% to $144.50 per share in premarket trading on Tuesday morning.