Food City to pay $44.5M in Tennessee opioid settlement
KNOXVILLE, Tenn. (WJHL) — K-VA-T Food Stores — also known as Food City — has agreed to pay $44.5 million as part of settling a 2021 lawsuit that accused the supermarket chain of unlawful opioid sales at its pharmacies, Tennessee Attorney General Jason Skrmetti’s office announced Thursday.
“Every entity that contributed to the opioid crisis must be held accountable. Our Consumer Protection Division remains relentless in the pursuit of justice and I am proud of their aggressive enforcement in this case,” Skrmetti said in a statement. “By paying a hefty price to resolve past misconduct, Food City provides critical resources to save lives and protect families and can now get back to the business of serving its customers and supporting Tennessee communities.”
Food City also agreed to an array of “injunctive relief” measures designed to prevent future instances of similar conduct, officials said. Those include providing additional training to pharmacy staff, updating its prescription validation process, and monitoring and reporting data related to suspicious activity.
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In addition, Food City agreed to provide specific employment opportunities to Tennesseans who are in recovery from opioid addiction, according to the news release from Thursday, Sept. 21. A settlement in a civil lawsuit does not equate to admission of any of the plaintiffs’ allegations.
In a statement, Food City said K-VA-T “has continually disputed any allegations of misconduct made in these actions.” It added it believes “the settlement agreement is in the best interest of all parties and will contribute to opioid-related programs that are being established as a result of the previous settlements with national retailers and distributors.”
Then-Attorney General Herb Slatery III sued the Virginia-based chain in February 2021 for allegedly violating the Tennessee Consumer Protection Act, as well as violating the state’s public nuisance statute at three Knoxville-area stores that the state claimed sold particularly high amounts of opioids over more than a decade.
The lawsuit claimed “Food City zeroed in on opioid sales at its in-store pharmacies and engaged in a series of unlawful acts that led it to become one of the biggest sellers of highly-diverted opioids in Tennessee.” It said the company did so “as part of an intentional, corporate-driven strategy to maximize profit centers elsewhere,” meaning outside of the tight margin core grocery business.
The suit also accused Food City of “endangering the health of Tennesseans and interfering with the commercial marketplace.”
Food City wrote in its statement that the cases, filed in Knox County and Sevier County, “are examples of cases brought nationwide against manufacturers, distributors, and retailers of prescription opioid products.”
Most of the settlement funds will support opioid abatement efforts in East Tennessee. They’ll be administered through the Tennessee Opioid Abatement Council.
The council funds “programs, strategies, expenditures and other actions designed to prevent and address the misuse and abuse of opioid products and treat or mitigate opioid use or related disorders,” according to a Tennessee state website.
Food City ranked 68th on the most recent “Progressive Grocer 100” list published in 2022, with reported revenues of $3.1 billion for 2021. Kroger, the nation’s fourth-largest chain on the list, agreed to a national opioid settlement earlier this month that will cost it about $1.4 billion.
Food City also wrote in its statement that it is “committed to the communities it serves and has pledged its support of local drug rehabilitation centers and their efforts to assist persons in recovery to lead more productive lives.”
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The entire statement from Food City is below:
K-VA-T Food Stores, Inc. announced today that it has entered into an agreement to end two opioid-related cases in Knox County and Sevier County Tennessee.
The cases are examples of thousands of cases nationwide brought against manufacturers, distributors, and retailers of prescription opioid products. The allegations in these two actions focus primarily on circumstances from more than a decade ago. K-VA-T has continually disputed any allegations of misconduct made in these actions. The agreement states that it is not an admission or evidence of any liability or wrongdoing. K-VA-T believes the settlement agreement is in the best interest of all parties and will contribute to the opioid-related programs that are being established as a result of the previous settlements with national retailers and distributors.
K-VA-T is committed to the communities it serves and has pledged its support of local drug rehabilitation centers and their efforts to assist persons in recovery to lead more productive lives.
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