Bashas’ Takes Action Against Rogue Meat-pricing

Regional independent Bashas’ Family of Stores took quick disciplinary action against meat department employees at some of its AJ’s Fine Foods stores for mislabeling steaks and beef, and resolved the issue with a donation to local food banks.

The actions were uncovered by a USDA investigation that took place from January 2010 to February 2012, during which time the accused meat department members mislabeled USDA Choice Steaks as USDA Prime, a higher grade that costs more, resulting in customers being overcharged. In addition, these employees added some cuts of expensive prime and choice steak to American-style Kobe ground beef in order to improve the consistency of the grind.

“Due to our full cooperation with the USDA and the U.S. Attorney’s office for the District of Arizona, we’ve entered into an agreement to resolve the matter,” said Edward “Trey” Basha, president and CEO of the Chandler, Ariz.-based grocer. “We agreed to pay $1.47 million in restitution – based on total gross sales of these products – to a group of Arizona food banks. Both parties agreed that this was a great way to remediate the damage done and help others in need, because there was no means of identifying which customers bought the affected items, and each customer’s loss was so minimal, issuing individual restitution would have been logistically difficult.”

The funds will be distributed evenly to six food banks in the areas served by Bashas'.

Disciplinary action including terminations occurred for those who violated Bashas’ company policies, and all meat department members were fully retrained. Upper management at Bashas' was unaware of the employee misconduct, and the USDA concluded that it didn’t pose any health risk.

As a preventative measure, Bashas' implemented a comprehensive compliance program led by its chief compliance officer that includes extensive monitoring of its stores and ongoing member training.