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. 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.”

  2. 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.

  3. 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.

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