Sysco Corporation (NYSE:SYY) has agreed to pay $19.4 million to settle all claims with the state of California stemming from the company’s now-discontinued practice of using unrefrigerated sheds for short-term food storage. In an investigative report aired last fall, NBC San Francisco found that the world’s largest food distributor was routinely making fresh food deliveries from refrigerated trucks — including meat, produce and dairy — to unrefrigerated, often dirty and pest-infested outdoor storage units.
Several hours later, the food items were picked up by Sysco sales representatives who took them to restaurant and institutional customers, including schools and hospitals. The TV news investigation forced Sysco to shut down drop sites, which supported its seven California distribution centers from Sacramento to San Diego. The California Department Public Health (CDPH) was next to investigate. In addition to finding all the drop sites, CDPH went through Sysco’s records from July 2009 to August 2013 to find that 405,859 foods were stored at the sites during the period. The state food safety officials found that food items were illegally stored for 23,287 days. The local NBC affiliate recorded temperatures in storage sheds in Concord and San Jose reaching 80 degrees before the sales people, who typically used personal cars (also without refrigeration) to make the delivery of food items to the customer, finally picked it up. Sysco customers said they were unaware the safety of the food they were serving was put at risk by Sysco’s irresponsible delivery practices. It went on for at least 10 years. Sysco’s $19.4 payment will be divided as follows: $15 million to cover penalties, $3.3 million for four new CDPH investigative positions, $1 million for food banks, and $127,000 in costs. The settlement ends lawsuits brought against the company by two California counties. Sysco operates 193 distribution centers serving 425,000 customers and has sales of more than $44 billion.
