Business

Ben & Jerry’s sues parent company Unilever over selling Israeli business

A tub of Ben and Jerry’s ice cream, manufactured by Unilever Plc.

Chris Ratcliffe | Bloomberg | beautiful pictures

Ben & Jerry’s is suing the parent company Unilever stopped selling its Israeli business to a local licensee, a move the consumer products giant said would keep ice cream products available in Israel and the occupied territories.

Ben & Jerry’s said in a lawsuit filed in federal court in New York on Tuesday that Unilever’s decision was made without the approval of the independent board of directors, the body with primary responsibility in the matter. the protection of the integrity of the brand name.

A judge on Tuesday rejected Ben & Jerry’s application for a temporary injunction but ordered Unilever to present cause by July 14 as to why the preliminary injunction should not be issued.

In a statement, Unilever said that the “deal is closed” and that it does not comment on pending litigation. Representatives for Ben & Jerry’s did not respond to a request for comment.

The lawsuit marks the latest development in a controversy that erupted last year when Ben & Jerry’s said it would stop selling in Israeli-occupied West Bank territory since the Six-Day War in 1967. .

The Israeli government considers the occupied territories to be part of its economy and any attempt to boycott business in these areas is considered applicable to the country. Stopping the sale of ice cream in the occupied territories would likely end sales throughout Israel.

In its lawsuit, Ben & Jerry’s says its brand is “synonymous with social activism” and that as part of an agreement acquired by Unilever in 2000, it reserved “primary responsibility for safeguarding integrity” of the Ben & Jerry’s brand through its independent board of directors.

It says Unilever has made public the right of the brand to make decisions about its social mission. But then last week, Ben & Jerry’s said Unilever “suddenly reversed course.”

Unilever announced last week that it had sold the Israeli arm of Ben & Jerry’s to American Quality Products, which licensed the production of ice cream products in Israel. American Quality said it will continue to sell Ben & Jerry’s under its Hebrew and Arabic names throughout Israel and the occupied territories.

Despite the right of Ben & Jerry’s independent board of directors to make decisions about the brand’s social mission, Unilever said in its announcement of the purchase that it was entitled to enter into the agreement because it had has primary responsibility for financial and operating decisions.

After Unilever announced the sale, Ben & Jerry’s said in its lawsuit that its board held a special meeting on Friday and voted to sue over the decision.

In an interview with CNBC following Unilever’s move last week, Israeli licensor Avi Zinger of American Quality Products said any potential lawsuits would be “between Unilever and Ben & Jerry’s. I have there’s a deal.”

– Candice Choi of CNBC contributed to this report.

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