Ben & Jerry’s sues parent Unilever over sale of Israeli business

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

Chris Ratcliffe | Bloomberg | Getty Images

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

Ben & Jerry’s said in a lawsuit in federal court in New York on Tuesday that Unilever’s decision was made without the approval of its independent board of directors, which has primary responsibility for protecting the integrity of the name. of its brand.

A judge denied Ben & Jerry’s request for a temporary restraining order on Tuesday, but ordered Unilever to show cause by July 14 why a preliminary injunction should not be issued.

Representatives for Unilever and Ben & Jerry’s did not immediately respond to requests for comment.

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

The Israeli government considers the occupied territories part of its economy and any effort to boycott business in these areas is considered to apply to the country. Halting ice cream sales in the occupied territories would have ended sales throughout Israel.

In its complaint, Ben & Jerry’s said its brand was “synonymous with social activism” and that as part of its agreement to be acquired by Unilever in 2000, it reserved “primary responsibility for safeguarding the integrity from Ben & Jerry’s. brand through its independent Board of Directors.

He said Unilever had publicly acknowledged the brand’s right to make decisions about its social mission. But last week Ben & Jerry’s said Unilever “had abruptly reversed course”.

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

Despite the right of Ben & Jerry’s independent board of directors to make decisions on the social mission of the brand, Unilever said when announcing the sale that it had the right to enter into the agreement because it had reserved the primary responsibility for financial and operational 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 pursue the decision.

In an interview with CNBC after Unilever’s decision last week, Israeli licensor Avi Zinger of American Quality Products said any potential lawsuit would be “between Unilever and Ben & Jerry’s. I already have a OK”.

— CNBC’s Candice Choi contributed to this report.

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