Aiexpress – Family Dollar has admitted to storing food, drugs, medical devices, and cosmetics in unsanitary conditions at a distribution center in Arkansas, as announced by the US Department of Justice. As a result, the company has agreed to pay a substantial sum of nearly $42 million.
The warehouse located in West Memphis, Arkansas was closed down in 2022. This action was prompted by an inspection conducted by the FDA, which revealed the presence of a large number of both dead and alive rodents, as well as deceased birds.
Family Dollar, a subsidiary of Dollar Tree, has been charged with one misdemeanor count. The charge is related to causing FDA-regulated products to become adulterated while being held under insanitary conditions at their 850,000-square-foot distribution center.
The Department of Justice (DOJ) announced on Monday that a record-breaking $41.675 million fine and forfeiture had been imposed in the largest-ever food-safety case in the United States.
According to the plea agreement, Family Dollar acknowledged that it started receiving an increased number of reports regarding mouse and pest problems with deliveries from the warehouse in August 2020. The agreement also states that certain stores reported receiving shipments from the center that contained rodents and products that had been damaged by rodents.
Family Dollar acknowledged that a number of its employees were aware of the warehouse conditions that led to FDA-regulated products becoming adulterated, which is a violation of the Federal Food, Drug, and Cosmetic Act.
The company admitted that it continued to ship FDA-regulated products from the warehouse until January 2022. In that month, the FDA initiated an inspection of the facility after receiving a complaint from a customer. During the inspection, the FDA discovered live and dead rodents, rodent feces and urine, as well as dead birds and bird droppings, as stated in a press release at the time.
According to the plea agreement, approximately 1,270 rodents were exterminated when the FDA fumigated the warehouse in January 2022. The rodents had been using the warehouse’s deserted conveyor system to move around the facility without any constraints.
The plea agreement revealed that the distribution center was responsible for shipping FDA-regulated products to more than 400 Family Dollar stores, which accounted for over 5% of the company’s total store count. According to the agreement, the warehouse had an average monthly shipment of 1.3 million cases of product, with a total value of $32.3 million.
In February 2022, the company made the decision to temporarily shut down the stores that were serviced by the warehouse. Additionally, they took the initiative to recall all drugs, medical devices, cosmetics, and food products that had been sold in those stores since January 2021. Subsequently, the warehouse itself was closed later on in the same year.
The plea agreement reveals that the facility had been in operation since 1994, making it the second-oldest distribution center for Family Dollar. However, it was also the least productive.
Family Dollar has been ordered to pay a total of $41.675 million, consisting of $200,000 in fines and $41.475 million in forfeiture money. This amount is determined to be the value of the adulterated FDA-regulated products that were found at the facility.
“Family Dollar customers place their trust in the safety of the products they purchase from retail stores like ours,” stated Jonathan D. Ross, US attorney for the Eastern District of Arkansas. He expressed deep concern over the fact that Family Dollar was aware of the rodent and pest problems at its distribution center in Arkansas, yet still chose to ship products that were unsanitary and posed a risk to consumers.”
Ross emphasized the potential harm to public health and the erosion of consumer trust caused by knowingly selling these products.
Family Dollar has stated that it provided extensive cooperation in the investigation conducted by the DOJ. As part of this cooperation, the company voluntarily recalled products that were shipped from the center.
Although no reported cases of consumers falling ill have been linked to conditions at the distribution center, the company faced legal action in the form of 14 consumer class actions. However, we have reached a tentative settlement in these cases without admitting any liability or wrongdoing.
“We are excited to move past the legal disputes and shift our attention back to our core mission of delivering affordable products to our customers. We remain committed to upholding the highest standards of quality and safety in everything we do.”
In a statement, Dollar Tree CEO Rick Dreiling expressed that the retailer had exerted considerable effort in assisting Family Dollar to resolve this longstanding issue and had taken significant steps to improve policies, procedures, and physical facilities to prevent any recurrence in the future.
Family Dollar announced in October its plans to open a state-of-the-art distribution center on the same site in West Memphis by fall 2024. They stated that the old facility would be completely demolished to make way for the new center.
