Family Dollar will pay $41 million penalty for rat-infested warehouse

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Will consumers see any of the money? Probably not.

Family Dollar and parent company Dollar General will pay $41.675 million in connection with a rodant-infested product warehouse in West Memphis, Ark. Food, drugs and cosmetics were among the products held in unsanitary conditions.

The companies entered a guilty plea to criminal charges and as a result, received the largest fine in a food safety case.

This week’s plea deal also requires Family Dollar and Dollar Tree to meet robust corporate compliance and reporting requirements for the next three years.

In February 2022 Family Dollar temporarily closed 404 stores served by the warehouse after the U.S. Food and Drug Administration (FDA) found a rodent infestation at the distribution center. The FDA said it acted after receiving a consumer complaint.

At the time, the FDA said it acted because it was concerned that some regulated products stored in the distribution center may have become contaminated and could pose a threat to the health and safety of the public. The FDA worked with the company to initiate a voluntary recall of the affected products that were shipped after Jan 1, 2022.

“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,” said Acting Associate Attorney General Benjamin Mizer. 

What the company knew, and when

According to the Justice Department, the company began receiving reports in August 2020 of mouse and pest issues with deliveries to stores. By the end of 2020, certain stores reported receiving rodents and rodent-damaged products from the warehouse. 

The company admitted that by no later than January 2021, some of its employees were aware that the unsanitary conditions caused FDA-regulated products held at the warehouse to become adulterated in violation of the Federal Food, Drug and Cosmetic Act (FDCA).

This isn’t Family Dollar’s first brush with the law. In 2019, Family Dollar, Dollar Tree and Dollar General agreed to pay a combined $1.2 million to the state of New York for selling products beyond their expiration dates.

The Justice Department did not say whether any of the $41 million will find its way to affected consumers. In December, Family Dollar settled a class action suit about the infestation and agreed to give affected customers a $25 gift card.

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