Family Dollar Stores pleaded guilty Monday to storing food, drugs, medical devices, and cosmetics in a distribution center that had a rat infestation, and it has agreed to pay a $41.675 million fine, authorities said.
The fine is “the largest-ever monetary criminal penalty in a food safety case,” the Justice Department said. Under the plea agreement, Family Dollar and its parent company Dollar Tree are also required to follow corporate compliance and reporting requirements over the next three years.
“When consumers go to the store, they have the right to expect that the food and drugs on the shelves have been kept in clean, uncontaminated conditions,” Benjamin Mizer, an acting associate attorney general, said in a statement. “When companies violate that trust and the laws designed to keep consumers safe, the public should rest assured: The Justice Department will hold those companies accountable.”
Family Dollar first received reports in August 2020 “of mouse and pest issues with deliveries to stores,” according to the plea agreement. The infested distribution in Arkansas center shipped FDA-regulated consumer products to more than 400 Family Dollar stores throughout Alabama, Missouri, Mississippi, Louisiana, Arkansas, and Tennessee, according to the Justice Department. Family Dollar also “admitted that by no later than January 2021, some of its employees were aware” of “adulterated” products due to the insanitary conditions, but that it continued shipping the products to stores until January 2022 — when live, dead, and decaying rodents, as well as evidence of rodents, were found during an FDA inspection. The company finally recalled products from the over 400 stores in February 2022.
“Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures 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 about these unacceptable issues at one of Family Dollar’s facilities.”
As part of its compliance, Dollar Tree said Family Dollar has hired a new chief legal officer and chief ethics and compliance officer. It’s also developed and implemented new procedures and controls to provide compliance and safety training to employees. Additionally, each of its distribution centers has undergone and passed a third-party audit over the past 18 months, the company said.
Family Dollar is planning to open a new facility in West Memphis, Arkansas, that is expected to start operations this fall and will provide over 300 jobs, Dollar Tree said.
Dollar Tree stock was down less than 1% in pre-market trading on Tuesday morning, to $144.50 per share.
