According to the Justice Department, grocery chain Family Dollar was fined $41.7 million, the largest financial penalty to date in a food safety case, for distributing food, medicine, medical devices and cosmetics from a rat-infested warehouse.
On Tuesday, Family Dollar pleaded guilty in federal court in Little Rock, Arkansas, to a misdemeanor count of storing products in unsanitary conditions, thereby causing them to be adulterated. The $41.675 million penalty is estimated to be the value of the products that were contaminated when stored in unsanitary conditions, according to the plea agreement.
The West Memphis, Arkansas, distribution center 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 in the United States and Canada.
Due to the infestation, Family Dollar temporarily closed its stores in 2022. The stores were closed for a few weeks but have all since reopened, said Kristin Tetreault, a spokeswoman for Dollar Tree.
According to the consent form, the rats had “established a presence in the warehouse” in July 2021. The rats used an abandoned conveyor system to move freely through the facility.
An employee filed a complaint with the Occupational Safety and Health Administration, and in August 2021, one of the company's regional regulatory compliance specialists said the rodent problem was “very noticeable.”
In 2022, Food and Drug Administration inspectors observed “live rodents, dead rodents in varying stages of decomposition, rodent feces and urine, and evidence of gnawing, nesting, and rodent odors throughout the facility, in addition to dead birds and bird feces,” it says the declaration of consent in the case.
“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,” said a statement from Jonathan D. Ross, the U.S. attorney for the agency Eastern District of Arkansas. “Knowingly selling these types of products not only endangers the public’s health, but also undermines consumers’ trust in the products they purchase.”
Fumigation of the warehouse in January 2022 eradicated up to 1,270 rodents, federal officials said.
On February 18, 2022, the company voluntarily recalled all medications, medical devices, cosmetics, and human and animal foods sold since January 1, 2021, in the 404 stores supplied by the infested warehouse, the Justice Department said.
The agreement reached Tuesday requires Family Dollar and Dollar Tree to meet “robust” corporate compliance and reporting requirements over the next three years. If the company does not meet the requirements, this period can be extended.
Dollar Tree said in a statement that it has “significantly improved” its compliance and safety programs by hiring experienced staff, conducting safety training and passing a third-party audit.
Rick Dreiling, chairman and CEO of Dollar Tree and a member of the board since March 2022, said the company has “worked diligently to help Family Dollar resolve this historic matter and significantly improve our policies, procedures and physical facilities.” Make sure it doesn’t happen again.”
Before the Family Dollar case, Mexican restaurant chain Chipotle had been hit with the largest fine in a food safety case when it was ordered to pay $25 million for its role in a foodborne illness outbreak that killed more than 1,100 in 2015 People fell ill and 2018.