Sysco pays $19.4 million to settle refrigeration case - The Packer

Sysco pays $19.4 million to settle refrigeration case

07/21/2014 12:02:00 PM
Coral Beach

Foodservice supplier Sysco Corp. will pay $19.4 million to settle all claims in California related to its past use of “drop sites” where food was temporarily stored without refrigeration.

“Food safety is Sysco’s No. 1 priority and it cannot be compromised,” Bill DeLaney, president and CEO of the Houston-based company said in a news release. “We sincerely regret that some of our California companies failed to adhere to our long-standing policies related to drop sites.”

Improper storage of food at drop sites in California area came to light a year ago after a local NBC television news affiliate recorded food deliveries of fresh produce, meat, chicken and dairy products in San Jose, San Francisco and Concord. Reports showed employees loading food into personal, non-refrigerated vehicles for delivery.

The TV report prompted the California Department of Public Health to investigate. State officials visited 14 drop sites, which they described as sheds not designed to store food.

“The California Department of Public Health and the county district attorneys received our full cooperation in their investigations of our practices,” DeLaney said in the release. “In addition to the settlement with the state, we have comprehensively addressed our food safety and quality assurance practices in California and across the Sysco enterprise.”

The settlement includes $15 million in penalties, $3.3 million to pay for four public health investigator positions for five years, $1 million in donations to California food banks and $127,000 in legal costs, according to Sysco’s release.

Changes to Sysco’s food safety practices include eliminating the use of drop sites, introducing mandatory annual food safety training for employees, new and improved food safety reporting, monitoring and compliance controls, according to the release.

Last year Sysco’s vice president of corporate communications, Charley Wilson, said Sysco’s policy is to require refrigeration at all times. He said the company accepted responsibility for the “breakdown in our system in California.”

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Brian Shifman    
July, 21, 2014 at 04:04 PM

Another example of government over reach: 4 public health investigator positions to paid for 5 years at $3.3 million equals $165,000 per year each. Use of fear related to food contamination doesn't justify taking advantage of taxpayer money by paying over the market salaries for the four health investigator positions.

July, 22, 2014 at 10:19 AM

Brian, I'm not defending the pay or penalty structure. However, I'm sure the inspectors will not receive a salary of $165,000. Hopefully, that penalty covers the entire cost of employment, i.e. overtime, benefits, taxes, insurance, admin, etc. It's probably still a nice salary though. The article also states that Sysco will have to cover the cost of the inspectors with $3.3M in fines, not the taxpayer.

Beverly MA  |  July, 22, 2014 at 09:12 AM

Public Health investigators get paid $165,000 per year for the 5 years, but the food pantry only gets a lump sum of 1 Million? Where does the $15 Million in penalties go? What is wrong with this picture?

R Henry    
LA  |  July, 22, 2014 at 10:38 AM

Hmm. Does this settlement in any way impact fresh produce distribution in a macro sense? Will the illegal immigrant who owns a pickup truck, goes to the Terminal Market every morning to buy for his route...then delivers out of his unrefrigerated truck...will this headline settlement have any effect on him and his business? Is what he does really any different than what Sysco got caught doing? Is the food delivered by Sysco held to a different standard than the food delivered by "Cheap Immigrant Produce"? If so, is that fair and appropriate? Should Health Departments act as a food distribution police force to ensure that food delivered to restaurants is done so in an approved manner? Yes, absurd questions. Sysco would be best punished by losing customers.

July, 22, 2014 at 01:45 PM

in response r henry its meat they did not refrigerated not "produce" that is grown on the ground.should get your facts right buddy

Produce Guy    
Texas  |  July, 29, 2014 at 06:35 AM

Henry has a point though. The selective enforcement of laws based on income needs to stop. Midsize companies (anyone with enough free money for lawyers and tax collectors to poach) get put through the ringer while smaller outfits get a free pass. I propose IMMEDIATE AND URGENT TORT REFORM for our industry and EQUAL ENFORCEMENT of laws and regulations from our government regardless of company size. Apparently, we are NOT all equal in the United States of America after all.

Cooler guy    
Northeast  |  October, 03, 2014 at 05:15 PM

What happens after 5 years when government inspectors are to be laid off or can they be laid off. They may have to fine someone else.

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