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

Ben & Jerry’s has sued parent company Unilever over its decision to sell the ice cream brand’s business in Israel to a licensee.

In a lawsuit filed in U.S. District Court in New York on Tuesday, Ben & Jerry’s said Unilever’s decision to divest its business in Israel last week “was made without the consent of Ben & Jerry’s Independent Board of Directors, the entity contractually empowered with protecting Ben & Jerry’s brand.” It noted this arrangement was agreed upon when Unilever acquired Ben & Jerry’s in 2000.

Ben & Jerry’s filed for an injunction to stop Unilever from violating the terms of its merger and shareholders agreement, “to preserve the status quo and protect the brand and social integrity Ben & Jerry’s has spent decades building.”

In a statement to The Wall Street Journal, a Unilever spokesperson said the company had the right to enter the arrangement and noted that “the deal has already closed.” Food Dive reached out to Unilever for additional comments. 

Last week, Unilever announced it would sell its Ben & Jerry’s business interests in Israel to Avi Zinger, the owner of American Quality Products Ltd (AQP), the current Israel-based licensee that had manufactured and distributed the ice cream brand in Israel and the West Bank. Through the arrangement, Ben & Jerry’s would be sold under its Hebrew and Arabic names under full ownership of AQP. 

Unilever reached the arrangement after reviewing Ben & Jerry’s July 2021 announcement that it would no longer allow its ice cream to be sold in the West Bank because it was “inconsistent with our values for our product to be present within an internationally recognised illegal occupation.” Ben & Jerry’s said it would not renew its license agreement with AQP when it was set to expire at the end of 2022, but would “remain in Israel through a different business arrangement.”

At the time of Ben & Jerry’s announcement, Unilever commented that it remained committed to its presence in Israel and “always recognised the right of the brand and its independent Board to take decisions about its social mission.” Ben & Jerry’s board chair later told NBC News that it had wanted to release a different statement that did not mention continued sales in Israel. 

The announcement by Ben & Jerry’s to end sales in the West Bank triggered a backlash from the prime minister of Israel, as well as several U.S. state attorneys general that challenged Unilever’s support of the ice cream brand. More than half a dozen states including Texas, New York and Florida divested their pension fund investments in Unilever. The Ben & Jerry’s announcement also triggered a shareholder lawsuit. AQP filed its own suit against Ben & Jerry’s in March over its decision to sever their relationship.