Poverty 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.
The 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.
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….
What shame with the children going hungry in this country. I guess I won’t be shopping at Costco.
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)
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.
Unbelievable…..
Any chance there was insurance on salable goods? By rejecting the merchandise they exercise the insurance.
Disgusting
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.
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!
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.
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.
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.
Alberto nailed it (randyjet too)…The lawsuits would start one week after the peanut butter was distributed.
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.
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.
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.
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.
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.
Not to feed hungry people? Who benefits, really? New Mexico, icky-pooh.
New Alabama food truck regulations prevent local churches from feeding the homeless
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.