Aw, Rats!
A few years ago, my son and I went to Chicago for one of his volleyball tournaments. After a long day of games, we headed to Lou Malnati’s Pizzeria for some Chicago-style deep dish. On our way back to our hotel, what I thought was a small dog crossed our path, only it had a long, hairless tail.
“Oh my God, look at that rat!” my kid exclaimed. This was easily the biggest rat I’ve ever seen, and it still haunts my dreams. It was also the first thing I thought of when I heard about the problems with Family Dollar’s warehouse.
Family Dollar is a ‘discount variety store.’ The franchise was purchased by competitor Dollar Tree in 2015. According to SEC filings, the company operates a total of 16,622 stores across 48 states and five Canadian provinces, which are divided about evenly between the two brands.
In August of 2020, Family Dollar started getting reports of mouse and pest issues with deliveries to stores in the southeastern U.S. By the end of the year some stores reported deliveries of rodents and rodent-damaged products.
The products were coming from a distribution center in West Memphis, Arkansas. Products from the warehouse were distributed to more than 400 Family Dollar stores in Alabama, Arkansas, Louisiana, Mississippi, Missouri and Tennessee.
The company acknowledged that by January of 2021, some employees at the warehouse were aware that the insanitary conditions were causing products to become contaminated. Many of the products stored there were regulated by the U.S. Food and Drug Administration, such as food, drugs, cosmetics and medical devices.
Products continued to be shipped from the warehouse until January of 2022, after an FDA inspection found “rodent evidence, including live rodents, dead rodents of various states of decay, rodent excreta pellets … gnawings, nesting, and odors indicative of rodents throughout the entirety” of the facility. In February of 2022, Family Dollar exterminated 1,270 rodents at the facility and launched a massive recall of products sold by the 404 stores serviced by the warehouse.
As a result, the Department of Justice launched an investigation and last month entered into a plea agreement with Family Dollar. As part of the deal, the chain pleaded guilty to one misdemeanor count of causing FDA-regulated products to become adulterated while being held under insanitary conditions. The chain also agreed to pay a $41.7 million fine – the largest-ever monetary criminal penalty in a food safety case.
In addition, both Family Dollar and Dollar Tree will be under robust corporate compliance and reporting requirements for the next three years.
“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 insanitary,” stated Brian Boynton, principal deputy assistant attorney general and head of the Justice Department’s civil division.
“Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures and compliance initiatives,” said Rick Dreiling, Dollar Tree’s Chairman and CEO. “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,” he continued. “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.”
I hope Family Dollar gets their rat problem under control so it will no longer plague them.
Reg P. Wydeven
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