MEMPHIS, Tenn. — Family Dollar Stores pleaded guilty and agreed to pay more than $41 million for unsanitary, rat-infested conditions at its distribution center in West Memphis, Arkansas.
The company agreed to enter a plea of guilty to a one-count misdemeanor violation relating to the adulteration of FDA-regulated products, Family Dollar said Monday.
The U.S. Department of Justice said the $41.675 million fine and forfeiture amount is the largest-ever monetary criminal penalty in a food safety case.
“Consumers trust that products purchased from retail stores such as Family Dollar are safe,” U.S. Attorney Jonathan D. Ross with the Eastern District of Arkansas said in a statement. “It is incomprehensible that Family Dollar knew about the rodent and pest issues at its distribution center in Arkansas but continued to ship products that were unsafe and unsanitary.”
WREG reported in January 2022 on several Memphis-area stores where employees reported rat infestations. The infestation led to product recalls and the closure of more than 400 stores.
The Justice Department said reports of rodent issues began reaching the company in late 2020, after deliveries to its stores. But officials say the company continued to deliver products to its stores until an FDA inspection was released in January 2022.
That FDA inspection reported that more than 2,300 live rodents had been captured at the West Memphis facility in 2021.
The inspection revealed “live rodents, dead and decaying rodents, rodent feces, urine, and odors, and evidence of gnawing and nesting throughout the facility,” the Justice Department said.
The West Memphis distribution center was closed in 2022.
Family Dollar, which is owned by parent company Dollar Tree, said it has created new compliance and safety roles and implemented new procedures and controls.
The company also confirmed that its West Memphis distribution facility will re-open by fall 2024 with more than $100 million in current and future investments, providing more than 300 jobs.
Family Dollar’s Chairman and CEO Rick Dreiling released a statement on the settlement:
“Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures, and compliance initiatives,” Dreiling said. “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. Since that time and even more directly when I assumed the role of CEO, we have worked diligently to help Family Dollar resolve this historical matter and significantly enhance our policies, procedures, and physical facilities to ensure it is not repeated.”
