Unilever sells Ben & Jerry鈥檚 Israeli business to defuse BDS row

A refrigerator bearing the Ben & Jerry's logo is seen at a food store in the Jewish settlement of Efrat in the Israeli-occupied West Bank July 20, 2021. (Reuters/File Photo)
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  • Ice cream brand said it does 鈥渘ot agree鈥� with the deal made by the parent company

JERUSALEM: Unilever this week sold its Ben & Jerry鈥檚 ice cream business in Israel to its local licensee for an undisclosed sum, aiming to smooth over a potentially damaging diplomatic row over the company鈥檚 political stance.
The deal comes after the US ice cream brand announced last year it would stop marketing products in the Israeli-occupied Palestinian territories, saying that selling there was 鈥渋nconsistent鈥� with its values. Under the new arrangement Ben & Jerry鈥檚 ice cream will be available to all consumers in Israel and the occupied West Bank.
Ben & Jerry鈥檚 has said it does 鈥渘ot agree鈥� with the deal made by the parent company.
The episode highlighted the challenges facing consumer brands taking a stand on Israel鈥檚 military occupation of the Palestinians, such as San Francisco-based Airbnb, which in 2019 reversed its decision to delist Israeli settlements.
The international boycott, divestment and sanctions (BDS) movement seeks to pressure Israel to abide by international law in its treatment of the Palestinians. Israel says such boycotts are discriminatory and anti-Semitic.
On Wednesday, Israel鈥檚 foreign ministry called the Ben & Jerry鈥檚 deal 鈥渁 huge victory.鈥�
鈥淲e will fight delegitimization and the BDS campaign in every arena, whether in the public square, in the economic sphere or in the moral realm,鈥� Israel鈥檚 Foreign Minister Yair Lapid said in a statement.
Last year, Israel condemned the sales boycott as 鈥渕orally wrong鈥� and said Unilever would face 鈥渟evere consequences.鈥� The consumer goods giant defended Ben & Jerry鈥檚 autonomy, but said it was 鈥渇ully committed鈥� to Israel and would find a solution by the end of this year.
Unilever had said previously it did not support the BDS movement, and reiterated that stance in a statement on Wednesday.
The new owner is the brand鈥檚 long-time Israeli ice cream licensee Avi Zinger, owner of American Quality Products. Zinger had sued Ben & Jerry鈥檚 after its decision in the West Bank, saying the company illegally severed their 34-year relationship.
鈥淭he new arrangement means Ben & Jerry鈥檚 will be sold under its Hebrew and Arabic names throughout Israel and the West Bank under the full ownership of its current licensee,鈥� Unilever said.
A representative for the Vermont-based Ben & Jerry鈥檚 said the company does not agree with Unilever鈥檚 announcement and will no longer profit from Ben & Jerry鈥檚 in Israel.
鈥淲e continue to believe it is inconsistent with Ben & Jerry鈥檚 values for our ice cream to be sold in the Occupied Palestinian Territory,鈥� the representative told Reuters.
Pension officials in at least six US states had restricted or sold Unilever stock or bonds to protest the Ben & Jerry鈥檚 decision, among them New York State Comptroller Thomas DiNapoli, Texas State Comptroller Glenn Hegar, and Arizona Treasurer Kimberly Yee. Representatives for all three told Reuters on Wednesday they would review Unilever鈥檚 move.
Billionaire activist investor Nelson Peltz, who is joining the board of Unilever next month, was involved in the discussions to bring about the resolution, said Rabbi Abraham Cooper, associate dean of the Simon Wiesenthal Center, a human rights organization that supported the deal. Peltz is the chairman of the center鈥檚 board of governors.
Peltz met with Unilever CEO Alan Jope in September before Trian Partners, the investment fund Peltz runs, bought any shares, to discuss the situation, a person familiar with the matter said.
Trian Partners commended the new arrangement in a statement, saying that 鈥渞espect and tolerance have prevailed.鈥�
Ben & Jerry鈥檚 and its independent board maintained the right to decide on its social mission when it was bought by Unilever in 2000. But Unilever said it 鈥渞eserved primary responsibility for financial and operational decisions and therefore has the right to enter this arrangement.鈥�
Israel captured the West Bank, part of the territory Palestinians want for an independent state, in a 1967 Middle East war. Most countries consider Israeli settlements on Palestinian land to be illegal. Israel disputes this.
鈥淭he return of Ben and Jerry鈥檚 to Israeli settlements, which were built on Palestinian land, exposes it to international legal accountability and its name will be on the United Nations blacklist of companies operating in settlements,鈥� The Palestine Liberation Organization鈥檚 Wasel Abu Yussef told Reuters.
Omar Shakir, Israel and Palestine Director at Human Rights Watch, said the deal sought to undermine the 鈥減rincipled decision鈥� to stop selling the ice cream in Israeli settlements.
鈥淲hat comes next may look and taste similar, but, without Ben & Jerry鈥檚 recognized social justice values, it鈥檚 just a pint of ice cream,鈥� he said in a statement.
Ben & Jerry鈥檚 Jewish founders, Ben Cohen and Jerry Greenfield, no longer manage the brand but are well known for their commitment to social justice. The company has recently expressed strong support for the Black Lives Matter movement, LGBTQ+ rights and electoral campaign finance reform.