PHOENIX — Bashas’ here has agreed to settle federal charges that it mislabeledat certain of its AJ’s stores between 2010 and 2012.
Under terms of a “non-prosecution agreement” Bashas has agreed to undertake a variety of remedial measures including disciplining or terminating culpable employees and launching a comprehensive compliance program to be overseen by a chief compliance officer. The retailer will also make donations totaling $1.47 million to various area food banks — an amount equal to the total sales generated by mislabeled meat, the U.S. Department of Agriculture said.
Prosecutors said AJ’s stores in 12 locations around Phoenix and one store in Tucson, Ariz., followed a practice of labeling USDA Choice graded tenderloins as USDA Prime. Stores also sold ground meat labeled Kobe that included trimmings from non-Kobe beef, officials said.
The USDA said it launched an investigation of AJ’s meat labeling practices following a tip, and that Bashas cooperated fully with investigators and launched its own investigation.
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Meat managers interviewed by investigators said they mislabeled meat for a variety of reasons. Some stated they felt entitled to “upgrade” the tenderloins because they disagreed with the initial “Choice” grade assigned by the USDA.
Others stated they believed it was appropriate to label and sell certain tenderloins as “Prime,” even if those tenderloins had been delivered in a “Choice” box, as long as the individual tenderloins met “Prime” grading requirements. Others stated they would engage in mislabeling whenever the AJ’s distribution center would run out of “Prime” tenderloins and did not want to disappoint shoppers looking for that product.
Some said they engaged in mislabeling because they felt pressure to satisfy their store’s profit-margin target — even though AJ’s did not provide additional compensation to managers who met such targets or impose discipline against managers who failed to meet them.
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