Bashas’, the operator of AJ’s (a “fine food” grocery store in Tucson and Phoenix), has entered into a Non-Prosecution Agreement with the Department of Justice concerning meat mislabeling practices that occurred at certain locations between January 2010 and February 2012.
Bashas’ agreed to provide $1,472,487.20, which represents only the total of sales generated from the sale of the misbranded meat, to the Tucson Community Food Bank, St. Mary’s Food Bank, United Food Bank, the Salvation Army, St. Vincent de Paul Food Bank, and the Association of Arizona Food Banks as restitution for the misconduct.
Under the Non-Prosecution Agreement, Bashas’ admitted and accepted responsibility for the misconduct of the employees who participated in the mislabeling practices and has voluntarily undertaken a variety of remedial measures (including disciplining and/or terminating culpable employees; adopting a comprehensive compliance program to be overseen by a Chief Compliance Officer) in an effort to prevent the misconduct from ever recurring.
Between January 2010 and February 2012, Bashas’ operated 12 AJ’s locations in the Phoenix metropolitan area and an additional location in Tucson. During this time period, employees within the meat departments of some of these locations followed a practice of taking beef tenderloin steaks that were graded as “Choice” under the USDA’s meat grading system, relabeling the steaks as “Prime” (a higher grade), and then selling the mislabeled steaks to customers.
According to the DOJ, because “Prime” steak is usually more expensive than “Choice” steak (AJ’s typically sold “Prime” steak for $35.99/pound and sold “Choice” steak for $25.99/pound during the relevant time period), the result of the mislabeling practice was in the overcharging of customers. Today’s prices at AJ’s in La Encantada Center the price of “Prime” New York Strip is $26.99/pound and “Choice” ranged from a low of $13.99 to $23.99/pound for Filet Mignon.
During the same time period, employees within the meat departments of some AJ’s locations also engaged in mislabeling practices concerning American-style “Kobe” ground beef, a special breed of beef that was typically sold for $5.99/pound. Specifically, these AJ’s locations followed a practice of adding trimmings from non-“Kobe” meat products (including “Choice” and “Prime” steaks, cuts of meat that typically sell for much more than $5.99/pound) to the “Kobe” ground beef mixture. As a result, the product was being sold by these AJ’s locations as “Kobe” ground beef when it was not, in fact, composed solely of “Kobe” ground beef.
In total, the offending AJ’s locations sold approximately 17,636 pounds of mislabeled “Prime” tenderloin steaks, and 139,861 pounds of mislabeled “Kobe” ground beef to customers, which generated $1,472,487.20 in total sales.
The United States Attorney’s Office’s entered into the Non-Prosecution Agreement with Bashas’ because there were no prior instances of misconduct associated with the store, absence of proof that Bashas’ upper management was aware of, or ratified, the misconduct, and the USDA’s conclusion that the misconduct did not create any public health risk.
Bashas’ also operates Food City and Bashas’ grocery stores. It has been widely believed for years that Food City stores, usually located in lower socio-economic neighborhoods, have sold inferior or expired food products that would not or have not been purchased at either Bashas’ brand or AJ’s brand stores.
The Robin Hood approach, which allowed Bashas’ to steal from the rich then donate what they stole to the poor, is considered by many to be the perfect example of the current U.S. Justice Department. The victims of the AJ’s mislabeling scam were ignored.
Bashas’ expired product sales continue. Within 15 minutes in one Food City store located on Tucson’s south 6th Avenue, three items were found for sale past their “best-used” date. Many items that appeared to be past their best-used date were from Mexico and had no best-used date at all.
Bashas’ came under scrutiny after pro-union forces made allegations of bad practices when they were trying to unionize the stores. Bashas’ fought hard against unionization. Because Eddie Basha, the founder of Bashas’, was a deep pocketed staunch democrat who donated heavily to democrat candidates, Arizona’s Democrat Attorney General at the time refused to do anything.
The claims of mislabeling and expired product dumping were chalked up to dirty union tactics.
Editor’s note: The photo above was taken on 8/31/13.