Ben & Jerry’s sues Unilever to block sale of Israeli business

On Tuesday, the Vermont ice cream maker filed a complaint in the U.S. District Court in New York seeking an injunction. Unilever (UL) “To protect the brand and social integrity, Ben & Jerry’s has spent decades building.”

Ben & Jerry’s has been doing business in Israel since 1987 but has come under pressure in recent years for selling in West Bank settlements, which is considered illegal under international law. In July 2021, he announced that he would end sales in the West Bank entirely.

This sparked a dispute with its longtime distributor in Israel, American Quality Products (AQP), which sued Ben & Jerry’s and Unilever in March, alleging they were “illegally ending their 34-year business relationship in order to boycott Israel.”

Unilever, one of the world’s largest sellers of consumer products including Dove soap and Magnum ice cream, sought to end the controversy by announcing last week that it had sold its Israeli business to Ben & Jerry for an undisclosed amount of AQP.

The retail giant said that in the future, Ben & Jerry’s will be sold under Hebrew and Arabic names throughout Israel and the West Bank.

But the decision to sell AQP caught Ben & Jerry’s board by surprise, according to a court filing that said its chairman was “stunned” to hear the news.

Since 2021, Ben & Jerry’s has been vehemently opposed to selling its products in the West Bank, saying it would be “incompatible” with the brand.

In her complaint on Tuesday, she noted that her brand values ​​are legally overseen by an independent board of directors under a 2000 agreement with Unilever.

The board decided to sue last week at a meeting in which five directors voted to allow the litigation and two Unilever representatives disagreed, according to Ben & Jerry’s.

AT statement Unilever acknowledged last week that “Ben & Jerry’s and its independent board have been empowered to make decisions about their social mission.”

But he argued that the parent company “retains primary responsibility for financial and operational decisions and therefore has the authority to enter into this arrangement.”

In a new statement on Wednesday, a Unilever spokesman confirmed that the company “had the right to enter into this arrangement.”

“The deal is already closed,” the spokesman said, adding that he would not comment on the upcoming litigation.

In a statement last week, Unilever said it conducted an audit of its business there “for several months, including jointly with the Israeli government.”

“Unilever took the opportunity last year to listen to perspectives on this complex and sensitive issue and believes this is the best result for Ben & Jerry’s in Israel,” the company added.

— Jordan Valinsky contributed to this report.

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