MEMPHIS, Tenn. — After permanently closing its previous 30-year-old warehouse in West Memphis, Arkansas, in 2022 after a rat infestation was found inside, the U.S. Department of Justice announced Feb. 26, 2024, that Family Dollar Stores LLC has pleaded guilty to a charge related to “insanitary conditions.”
The DOJ said Family Dollar pleaded guilty to one misdemeanor charge of “causing FDA-regulated products to become adulterated while being held under insanitary conditions.” The DOJ said a plea agreement includes a sentence of a fine and forfeiture of $41.675 million, “the largest-ever monetary criminal penalty in a food safety case.”
Family Dollar and Dollar Tree are required to meet “robust corporate compliance and reporting requirements for the next three years” under the agreement.
“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,” said U.S. Attorney Jonathan D. Ross for the Eastern District of Arkansas. “Knowingly selling these types of products not only places the public’s health at risk but erodes the trust consumers have in the products they purchase.”
“Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures and compliance initiatives,” said Dollar Tree Chairman and CEO Rick Dreiling. “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.”
West Memphis city leaders announced Wednesday, Oct. 11, 2023, that Family Dollar would return to the city with a newly rebuilt distribution center.
The city said more than $100 million is being invested in the new 850,000-square-foot “fully modernized distribution center,” which is set to be in operation by fall of 2024 and “will serve as a model of excellence for all facilities in the Dollar Tree and Family Dollar network.” They said the investment is meant to make sure the facility meets all health and safety standards.
City leaders said the new center would create 300 jobs in West Memphis at the start, with further workforce expansion plans. They said the center will be able to serve up to 1,000 Family Dollar stores in the region.
On Feb. 18, 2022, the U.S. Food and Drug Administration (FDA) announced that more than 1,000 rats were found inside the original distribution facility. The chain then issued a voluntary recall that impacted over 400 stores in the South. According to Mayor McClendon at the time, about 230 employees at the facility lost their jobs.
Inspection reports showed the building had violations related to rat infestations going back to January 2021, more than a year before the infestation was announced and several stores closed.
The state then filed a lawsuit against Family Dollar and Dollar Tree accusing the companies of deceiving consumers, negligence, and engaging in a conspiracy that allowed the infestation to occur.
The Associated Press contributed to this report.