Costco Orders a Million Jars of Peanut Butter Dumped In Landfill Rather Than Donated To The Poor

200px-Costco_Wholesale.svg250px-PeanutButterPoverty and hunger continue to be a major problem across the country. However, in a decision that baffles and outrages many, Costco has decided that it will not allow millions of dollars worth of peanut butter to be given away. Instead, the company has ordered that the food be dumped in a New Mexico landfill.

250px-WysypiskoThe almost one million jars of peanut butter were produced by Sunland Inc shortly before a salmonella outbreak in 2012 the forced the company into bankruptcy. However, this peanut butter is not tainted. Accordingly, there was a request to allow the food to be donated to food banks or even sold to companies serving institutional agencies like prisons. The food has been stored in a warehouse since the shutdown and Costco had initially agreed to a sale at low cost as ordered by the bankruptcy trustee. Then however the company suddenly backed out and said that it would not accept any other course than dumping the food in a landfill.

The food is worth almost $3 million and involves 950,000 jars – or about 25 tons.

It is highly disturbing that a company would waste 25 tons of food rather than allow food banks to use the food to reduce hunger among families across the country.

Such decisions are often treated as simpler by corporate executives, though the company now faces a public relations backlash.

Chrysler has faced the same backlash when it told the South Puget Sound Community College that it had to crush a rare original Dodge Viper that had been used to teach students on mechanics. It was one of 93 such cars donated to educational institutions and considered collector’s items by car aficionados. The cars would be worth $250,000 in a museum — money that could go to education if they school did not need the vehicle for lessons. The company however dismissed the objections and said that it never said that schools could keep the vehicles:

Approximately 10 years ago, Chrysler Group donated a number of Dodge Viper vehicles to various trade schools for educational purposes. As part of the donation process, it is standard procedure — and stipulated in our agreements — that whenever vehicles are donated to institutions for education purposes that they are to be destroyed when they are no longer needed for their intended educational purposes.

Once again, I am mystified by the sheer waste of the decision. Any liability issues can be addressed by contractual restrictions and waivers — and no sale options. Why destroy these vehicles being used by schools for students to learn a trade? Costco and Chrysler clearly have the right to make such decisions but the logic (and more importantly the humanity) of the decisions escapes me.

64 thoughts on “Costco Orders a Million Jars of Peanut Butter Dumped In Landfill Rather Than Donated To The Poor

  1. New Alabama food truck regulations prevent local churches from feeding the homeless

    Food truck regulations that went into effect on January 1, 2014 are preventing churches in Birmingham, Alabama from feeding the homeless.

    Minister Rick Wood of the Lords House of Prayer told ABC 3340 that police informed him that he would not be able to provide food for the homeless in Linn Park unless he owned a food truck and possessed a permit from the health department.

    The new regulations were put in place to protect brick and mortar restaurants. Of course, silly me. Homeless people are going to be eating out in nice sit-down restaurants in droves. If they had any freaking money, they wouldn’t be homeless! This is the Alabama version of the “war on poverty.”

    The church trucks have “Matthew 25, 35-40” painted on their sides.

  2. What guarantee is there the food wasn’t tainted? I am only guessing here, but my guess is that CostCo was afraid of possible liability for injuries if it turned out the food was defective. Then again, maybe there were other reasons, but I wouldn’t be surprised if this was one.

  3. Not stating an opinion here, asking a question: Could Costco’s lawyers have driven this decision to avoid any shred of liability just in case someone got sick? It seems as though a lot of what we consider illogical is driven by the liability factor.

  4. Sounds horrible and wasteful, but one has to wonder if the litigiousness of our society has made made Costco fear the small chance of a costly lawsuit should there be anything wrong with any of the peanut butter. There are many people filling nuisance lawsuits hopping for an out of court settlement, even without any actual harm. Just the very slim possibility of it being tainted (or they might be able to convince people it might be tainted) is all some people need to try a rip off scheme, which win or lose would cost Costco a fortune.

  5. When anything this BIG is done, and it’s disrespectful of community needs, it should be published FIRST with reasons. Just to do it and leave people wondering is, in addition to the transgression, mean-spirited of COSCO.

  6. I think the lawyers are to blame for this one. It is what put general aviation out of business for many years. There are so many outrageous awards that the cost of liability insurance made it impossible for airplane manufacturers to continue in business. In fact, even now with the system somewhat reformed. most of the cost of aircraft is in the liability insurance.

  7. Alberto nailed it (randyjet too)…The lawsuits would start one week after the peanut butter was distributed.

  8. I must side with Costco on this one. Examples of our legal system punishing good companies are constantly in the news. The recent injustice done to Toyota is an example.

    I have been a customer of Costco since their inception. In my opinion Costco treats their customers and their employees fairly. They seem to attempt to employ as many people with special needs possible.

  9. I am with Alberto and randyjet. If I am advising Costco, the peanut butter goes. I am sure several lawyers had already cranked up their class-action suits and had one foot out the door toward the courthouse with filing fee in hand.

    Blame this one on the lawyers.

  10. I think it is an outright SIN to waste food when people are going hungry.
    I am not a religious person, but this is so wrong on so many levels.

    Liability questions, if there are any, can be addressed by waivers of claims.

    I hope at least the landfill will let people come and pick these jars up.

  11. Liability is a major issue. 2 thumbs up to those who mention this earlier. Millions of people, around the world, are being diagnosed with food allergies every year. Imagine giving peanut butter to an individual or family who are allegic to peanuts, but never have been diagnosed or tested for food allergies. Nightmare waiting to happen!

    Futhermore, how can a company, like Costco, avoid any liability in this case? Do you know how arduous of a task this would be to prevent any liability on the part of Costco? Imagine the legal fees? No raises for Costco employees!

  12. Our food banks can’t meet the need. They are out of food before the end of the month.

    While it will cost money to get the lawyers to draw up a waiver of claims, that would seem a worthy use of Costco’s money. They should make the choice to spend their money for a common good.

  13. It appears from the linked article that Costco was concerned after 8 loads were rejected due to leaky peanut oil. It may have been safer for Costco to dump it rather than deal with potential liability issues, but the article does not provide any guidance to Costco’s possible concerns.

  14. Rafflaw has it I think, There is information missing that needs to be evaluated before one can decide if Costco is a bad actor in this or not. (And Costco has a large allegiance because of its worker policies so I find it hard to imagine they would do something like this knowing it could taint their image without good cause)

  15. Hey raff…. Would you knowingly put a product on the shelf that would cause problems with the store…. But potential liability if it happens to be tainted…. The rejected a performance contract….

    Clothes manufactures destroy clothes that have less potential liability except return of the items…. Because they don’t want the liability…. Of image problems….

  16. I am sure liability concerns played a part in their decision. I have never thought it was right to expect the poor to eat things that you would not sell. It’s one thing if you are talking about out of style clothes; it’s another if you are talking about tainted (or even possibly tainted) food. Costco is usually a socially responsible company (no I am not associated with them), but they do run a business. They might be able to get a waiver from food banks, but certainly not from the individuals who would consume the food. And even if they did get waivers, think of the bad publicity they would get from headlines such as “Thousands of homeless people taken ill after consuming peanut butter donated by Costco.” And homeless people are much less likely to get proper treatment if they do get sick. They may also be more likely to have compromised immune systems. That, coupled with not receiving proper medical care, makes the risk of eating tainted food much more dangerous.

    And, yes, they probably were influenced by lawyers, but after all, that is the job of their lawyers.

  17. This happens all the time with grocery stores across the nation. Good food is just thrown away because the lawyers warn of liability issues. They even lock the dumpsters so nobody can rescue the good food thrown into the garbage can. Health departments shutdown individuals from preparing food for the homeless because they lack proper permits based upon inspections, or they lack the proper insurance to cover liability issues. Someone once said, the love of money is the root of all evil, and that certainly is the case in this situation. If money were not involved, the moral choice would be crystal clear to everyone.

  18. Even though the peanut butter could be classified as distressed merchandise, its retail value of 3 million dollars would be no more than $300,000 wholesale. By sending the peanut butter to the landfill, rather than feeding the poor, Costco is protecting the hunger demand so that it may sell new peanut butter for 3 million dollars. Poor people have food stamps so there is no skin off of their butts but rather off the butts of the taxpayers instead. It is a variation on corporate welfare disguised as a business decision. Do I have to explain what is behind military surplus?

  19. Costco is not refusing to donate the peanut butter out of some warped pleasure from screwing over poor people. Donating would give them a tax break, would be cheaper than dump fees, and would grant them some small amount of good will.

    Sadly, attorneys make that impossible. Even if no one got sick, there would be a large number of lawsuits making all sorts of claims.

    Mr Turley, I can understand why you may find it perplexing why Costco can’t give their product away and benefit all parties. However you may want to look at some of your less scrupulous associates.

  20. Whenever you see regulations and laws restricting an industry that seems callous or stupid it means lobbyists representing competing interests greased the palms of politicians. We libertarians understand this quite well and pray the duopolists in the country finally wake up.

  21. Samantha: “Poor people have food stamps so there is no skin off of their butts but rather off the butts of the taxpayers instead.”

    Perhaps one day you’ll have the benefit of testing the veracity of your claim.

  22. nick spinelli

    We libertarians understand this quite well and pray the duopolists in the country finally wake up.
    Wee libertarians are triopolists wanting to be singularities.

    Three Wongs don’t make a Wight bro.

  23. Sure, go ahead and deny corporate welfare exists. In the way Ukraine has been looted, so is corporate America looting our nation. With so many in denial, this trend will continue until the US is so weak, even Mexico could invade and annex. There is always a loose wingnut ready to dismiss reality, clinging to the bankrupting ideology that makes his paycheck possible. Everyone in the water wants to be in the lifeboat, but those in the lifeboat won’t let them in. Before food stamps, no one threw away food.

  24. If anyone has done any canning and their jars haven’t sealed properly, you know your product isn’t safe to eat. If the jars were leaking peanut oil it would indicate the seal was broken or the jar was cracked. There IS a real potential that the peanut butter could be contaminated. I know peanut butter has a long shelf life, even opened, but I can see the hesitation in giving the peanut butter to people for consumption. I do understand the frustration though when the products are being dumped instead of donated just because they may be a few days past their expiration date.

  25. It isn’t just that the peanut butter could be contaminated, annie. The leaking oil could contaminate other products even non-food items. Someone with peanut allergies could get sick or worse.

  26. No argument there, Anne. If this nation was sensible about helping the poor, it would provide tax incentives to donate food to the hungry. Instead, politicians fund a food stamp program that enriches corporations, artificially inflates demand for food, driving up the cost for all taxpayers who, by the way, pay for the food stamp program in the first place. I predict that we will be sending food stamps to Africa in the not too distant future so the starving will have the choice to begin eating expensive junk food, rather than preparing meals from staples from scratch. And millions of gullible people will sign on in the name of helping starving people in Africa, too witless to see through the smoke in mirrors.

  27. Dredd, How non PC of you to make fun of people w/ lisps. Of course, your “favorite” Winston Churchill had one. Whenever I say libertarian, it is small ‘l’ and we libertarians believe more choice, more freedom. I would be pleased w/ a dozen or so choices.

  28. Samantha, The same pols also are big on burning corn in our cars. For our culture, we consume too many corn products. But for starving nations, it’s obscene.

  29. Darren, I do agree that they could’ve sifted thorough the jars and found the ones that were intact and randomly tested them for safety. I read that this peanut butter came from the same plant that was involved with the salmonella contamination in their peanut butter a couple of years ago, but if tested and safe, they should’ve been donated.

  30. Darren, Blame trial lawyers. One sickness, even if unrelated, and Costco’s tit is in a wringer. Costco is a good corporate citizen. It’s too bad for the bad publicity.

  31. nick spinelli

    Dredd, How non PC of you to make fun of people w/ lisps. Of course, your “favorite” Winston Churchill had one. Whenever I say libertarian, it is small ‘l’ and we libertarians believe more choice, more freedom. I would be pleased w/ a dozen or so choices.
    Wisps? Not! Wongo!

    That claim is so “will o the wisp” bro.

    Anyone in our culture who hides behind a word is hiding behind a cup.

    Our basic language is doublespeak.

    Created just to thwart ball busters bursters.

    Like coffee cups, which hold anything liquid but claim to be “a coffee cup.”

    I am a solid, sir.

    Just American, no -ist, -ism, -arian, -an, -ic, or other agenda poured into the shape shifter “coffee” cups.

    I am SC (socially correct) to the bone.

    I care none for politically correct defect, I care only for the common good.

    And Winston you say?

    He believed so much in Armageddon that the almost made it happen.

    There is a “Winston” living today who could very well make it happen.

  32. I’m sure our good neighbor Costco has/will make up for this by “paying forward” in many other ways. Like Nick S stated above, to release this stuff Costco would be sitting ducks. You know, the “ambulance chasing” trial lawyers here in the Seattle area have even made watching television a very unpleasant affair with their commercials… sadly preying on the viewers with relentless abandon. On the local stations which broadcast the old shows it’s the only ads shown now-a-days. Those “feel good” shows are now so sullied by the ad content I can’t watch them. The article didn’t say so but I’m assuming Costco’s name was all over the labels of this product, that’s why they were even involved.

  33. “produced… shortly before a salmonella outbreak in 2012…”

    personally, I think we’ve had LOTS of proof in the past of how bad things have to get before the authorities will do anything. I wouldn’t trust a single jar of the product of that plant for MONTHS before the shutdown not to have actually been grossly contaminated!

    Maybe somebody at Costco had reservations too. The linked article said “after extensive testing” … Costco changed their minds about the donation. no details about what exactly the testing showed, except for the “leaky” peanut oil…

  34. “A state is better governed which has few laws, and those laws strictly observed”
    — Rene Descartes

    Shakespeare’s exact line ”The first thing we do, let’s kill all the lawyers,” was stated by Dick the Butcher in ”Henry VI,” Part II, act IV, Scene II, …

  35. There is one aspect of this that most fail to realize. Corporations, like politicians, have reporters in their back pockets. Sometimes it’s quasi legit[giving info for scoops], sometimes it’s good ol’ fashioned money under the table. One must ALWAYS ask themselves when reading stories like this. Who has something to gain? Why, Sam’s Club does! Do you think the Walton’s might have a reporter or two in their back pockets. ALWAYS be skeptical when it comes to reporting, ALWAYS!

  36. I dont work for Costco but I do vol. work at a food pantry in rural Jefferson County Mo outside St Louis I cannot speak for Costco as a whole but we get a hugh amount of donated food from our Costcos locally…

  37. amunre, Thanks for the info. My sister works @ a food bank in the northeast and Costco is a big supporter. As I said, this smells like a Donald Segretti dirty trick, if you’re up on your Nixon history.

  38. Darren, the law wouldn’t protect them since they are aware there could be problems with the product.

  39. roflmao at those who think the people who have food stamps ARENT SUFFERING. its pitiful for so many to be so inhumane.. its also hilarious for the people to still not see the truth of what is happening even though it has been told to you over and over.. this is nothing more then a push for ww3…. just as the cutting of food stamps or did all of the so called news aficiandos miss the articles where supermarkets and food warehouses have had to cut back on the hours of all workers because the cut in food stamps has diminshed demands for food? or maybe they are as usual using selective memory to justify their own bs lives fraught with lies? its more the likely the latter.. since WE ALL KNOW TAXES PAY FOR NOTHING BUT MILITARY WEAPONS OF WHICH IS NOW BEING USED AGAINST YOU…. its a guarantee that those same people lipping off about foodstamps and welfare have never and they never will question why THE USA PAYS ISRAEL 4 billions a year for a holocaust that didnt happen here on american soil…… YES I SAID IT. ITS PUT IN YOUR FACES EVERYDAY but hey ignore that so that you can continue to spread the lies about blacks who are the welfare kings and queens… meanwhile ignoring the facts that there is a certain group who are supposed to be the chosen ones that are the real kings and queens of welfare the information is out there… there is even a whole sect of them that refuse to work. just grow up get married get on welfare and birthed children year after year until they are to old to do it anymore and then its their kids turn…. don’t worry after this post i will have no more to say. for years when i came here reading the posts then found the nerves to start posting myself i ASSUMED i had finally found a group of people who know and understand. the last year has taught me that boy oh boy was i wrong…. about it all…those who are real left a while ago time for me to do the same.. GOOD THING UNLIKE THE REAL POSTERS BEFORE ME I WONT BE MISSED..

  40. Robin:

    I hope that you can comment more here as your opinions contribute to the debate here. One thing that I might offer is that most of the people who visit this website do not comment and instead just read. So if it seems like it might be fruitless to write articles here because there are those who don’t agree, understand that many people read what you have to say and can benefit from differing perspectives

    For myself there is no person here I have completely agreed with as there is no person I have completely disagreed with on the various issues discussed here.

    Remember that all who contribue their opinions in an articulate and respectful manner are equal as individuals here and elsewhere.



    I would miss you. I have always appreciated your independent way of looking at issues. Sometimes we are on the same side of an issue, but other times we have been on different sides, but that is what makes dialogue meaningful and challenging. Such can be frustrating at times, but I would hope you reconsider sharing your thoughts with us.

  42. I couldn’t agree more that a lot of taxes are wasted and miss spent. I do not know a single person who is against the idea of helping the hungry. But I know lots of people who are incensed by how much money is wasted on the food stamp program. Take the VA hospital, for example, which delivers health care to patients in the same way that a food bank delivers groceries to the hungry. The first, taxpayer to patient. The second, donor to the hungry. In other words, there is no for-profit middleman taking a huge share of the pie, living the high life, gating himself in an affluent community, working the system while those who are truly hungry have to share half a pie. If the VA hospital were run in the same way that the food stamp program is run, that is, turning the entire VA budget over to insurance companies and healthcare providers directly, very rapidly greed and inflation would dilute the system, and to maintain the same level of health care, the costs would escalate tenfold. Now, who doesn’t think that it would be a good idea for the government to set up food pantries, in the way it sets up healthcare clinics for veterans, that for the same amount of money that is spent on food stamps today, 10 times the food could be delivered for no extra cost. Or put another way, the same food delivered via food stamps today, could be delivered for a fraction of the cost. Sure, some food executives might end up having to go to the pantry themselves, but who doesn’t think that’s a good idea? Everything about our democratic society has been overrun by profit and greed. Anyone who believes that more taxes will not translate into more profit and greed, is either on the take himself or is severely misguided.

  43. One of the ways I would help my clients prove they were being stalked was just like this, lay the bait and they take it.

  44. See Nick….. You admitted that you stalk….. Whatever else could this mean….

    on 1, April 3, 2014 at 2:24 amNick Spinelli
    One of the ways I would help my clients prove they were being stalked was just like this, lay the bait and they take it.

    You bait people…. Is this the purpose of this blog…. Then respond after you have started something….. And then you’re the one being stalked…. That’s a little paranoid even for you….

  45. From a purely potential litigation point of view, I would probably have made the same decision on the peanut butter. For the cars, litigation isn’t the issue, so that makes less sense.

  46. Some corrections: Salmonella discovered in jars fall of 2012; plant immediately closed; refurbished from fall 2012 through April 2013; reopened with full FDA and Costco approval; PB produced for Costco in 2013, millions of jars sold starting June 2013; financial problems close the plant in October 2013; 950k jars in stock when closed; Costco rejects PB in February 2014; extensive testing shows no food quality problem, only marketing problem due to a very small number of natural product jars (no artificial stabilizers) leaking peanut oil; Costco refuses to permit any disposition other than dumping all of it.

  47. Fear of lawsuits drove both the waste of both the peanut butter and the car.

    The peanut butter was made by a company that went out of business due to a salmonella outbreak. If some of them lacked stabilizers, there would have been concerns that there could be other problems with the product that might have gone undiscovered. One could argue that the homeless can’t sign a waiver to eat it at their own risk, because some of them would not be competent.

    The Doge Viper was one of the pre-production cars loaned to technical schools. They are not certified to be driven on the street. Supposedly, it was rumored that 2 of the cars had been driven, thus exposing the manufacturer to liability. Thus they decided to crush the car, breaking the hearts of car aficionados around the world.

    I had a friend once who worked for a catering company. After every event, they always had extra meals. She asked, but was forbidden to drive the meals to homeless shelters. They felt the liability was too great to keep the meals in the insulated carriers for the duration of the event, and then an additional truck ride.

    One would think we could take reasonable precautions so these seemingly minor problems could be resolved sensibly. But in today’s litigious society, most live by the adage “better to be safe than sorry.”

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