Sysco reaches settlement with California on all claims related to company's past use of drop sites in the site; Sysco to pay US$19.4M, including US$15M in penalties

Nevin Barich

HOUSTON , July 18, 2014 (press release) – Sysco Corporation (NYSE:SYY) has agreed to settle with the State of California all claims related to its past use of drop sites in the state. The $19.4 million settlement includes a payment of $15 million in penalties, $3.3 million to fund four California Department of Public Health investigator positions for five years, a $1 million donation to food banks across California, and $127,000 in costs.

Sysco issued the following statement today regarding its commitment to food safety. Bill DeLaney, Sysco's president and chief executive officer, said:

"Food safety is Sysco's No. 1 priority, and it cannot be compromised. We sincerely regret that some of our California companies failed to adhere to our long-standing policies related to drop sites. The California Department of Public Health and the county district attorneys received our full cooperation in their investigations of our practices. In addition to the settlement with the state, we have comprehensively addressed our food safety and quality assurance practices in California and across the Sysco enterprise by putting in place the following positive steps:

"First, as we stated in September 2013, we eliminated the use of drop sites across Sysco. Second, we have introduced mandatory, annual food safety training for all employees across Sysco. Third, we are implementing additional and improved food safety reporting, monitoring and compliance controls across our operations to ensure adherence to our policies."

"Taking these steps reflects Sysco's commitment to food safety across our enterprise. We accept responsibility for the breakdown in our system in California, and we have taken this opportunity to improve our practices and to re-emphasize to our customers and our employees that food safety is our No. 1 priority."

About Sysco

Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. The company operates 193 distribution facilities serving approximately 425,000 customers. For Fiscal Year 2013 that ended June 29, 2013, the company generated record sales of more than $44 billion. For more information, visit www.sysco.com or connect with Sysco on Facebook at www.facebook.com/SyscoCorporation or Twitter at www.twitter.com/Sysco.

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