Glennville, Georgia, Family Dollar, Dollar Tree, competing discount stores. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)
Whew! Family Dollar and its parent company Dollar Tree, are in the middle of a major scandal involving a rat-infested distribution center in Arkansas.
Authorities found the warehouse, which is responsible for shipping discounted goods to various Family Dollar stores across the country. But the building was in deplorable conditions, leading to a record-breaking fine of $41.6 million,.
And roommates, these rats were definitely not there to score some dollar deals.
According to the official report, these uninvited guests had taken up residence in the warehouse and were causing all sorts of havoc as of 2020. Rats were reportedly chewing through products and leaving feces and urine around the place.
By the end of the year, the rats had caused significant damage to the products allegedly being delivered to Family Dollar and Dollar Tree stores. Yet despite these alarming signs, the company continued shipping items from the warehouse until January 2022.
Meanwhile, the Food and Drug Administration (FDA) didn’t know the full extent of the problem until they finally showed up to conduct an inspection in 2022 following multiple complaints. Investigators found live rats, dead and decaying rats, rat feces, urine, odors, and signs of gnawing and nesting throughout the facility.
The company was ultimately charged with one misdemeanor count of debasing FDA-regulated products by holding them in unsanitary conditions, per USA Today.
Family Dollar admitted to storing food, drugs, medical devices, and cosmetics in unsanitary conditions in the Arkansas facility. The company also confessed that poor warehouse conditions spoiled many of the shipped products, violating federal law.
The resulting fine from the FDA was no laughing matter either. The firm and its parent company received a whopping $41.6 million penalty. That’s a lot of dollars, even for Family Dollar!
Chairman and CEO Rick Dreiling reacted to the news in a statement released on Monday (February 26).
He said, “Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures and compliance initiatives.”
Dreiling added:
“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.”
Family Dollar has agreed to meet corporate compliance and reporting requirements for the next three years as part of the plea deal.
Additionally, Family Dollar has announced plans to make amends and regain customer trust. One step forward is reopening a “fully reimagined and refreshed distribution center” in West Memphis, Arkansas.
The discount retailer expects to open the new facility in late 2024.
