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

• Ben & Jerry’s is suing Unilever to prevent the transfer of the company’s Israeli operations.
• Ben&Jerry’s announced last year it would stop selling its products in the West Bank region.
• Ben & Jerry’s is suing Unilever over the sale of its Israeli business to American Quality Products.

Ben & Jerry’s is suing Unilever, its parent company, to prevent the transfer of the company’s Israeli operations to a local licensee, a move that the multinational conglomerate claims will keep the ice cream goods accessible in Israel and the country’s occupied territories.

Ben & Jerry’s claimed in a lawsuit submitted on Tuesday to a federal court in New York that Unilever’s choice was made without the consent of its independent board, which is primarily in charge of preserving the reputation of its brand name.

While denying Ben & Jerry’s request for a temporary restraining order on Tuesday, the judge did urge Unilever to provide justification by July 14 as to why a preliminary injunction should not be issued.

Requests for comment from Unilever and Ben & Jerry’s representatives were not immediately fulfilled.

The lawsuit is the most recent development in a dispute that was started last year when Ben & Jerry’s announced it would stop selling its products in the West Bank region that Israel has been occupying since the Six-Day war in 1967.

The Israeli government views the occupied territories as an integral part of its economy, and any attempts to impose a boycott on the region are considered as having an impact on Israel as a whole. Israel’s whole market for the ice cream would have been shut down if sales in the occupied territories had been stopped.

As part of the agreement to be acquired by Unilever in 2000, Ben & Jerry’s said that its brand is “synonymous with social activism” and that it had reserved the “primary responsibility for maintaining the integrity” of the Ben & Jerry’s brand through its independent board.

It claimed that Unilever had acknowledged the brand’s right to decide how to carry out its social objective in the public eye. Ben & Jerry’s claimed Unilever “abruptly switched course” last week, though.

Last week, it was revealed by Unilever that it has sold the Israeli division of its Ben & Jerry’s business to American Quality Products, the Israeli distributor of the ice cream. In all of Israel and its occupied territories, American Quality indicated it would continue to sell Ben & Jerry’s under Hebrew and Arabic names.

Unilever said in its announcement of the sale that it had the authority to engage into the arrangement since it had reserved primary responsibility for financial and operational choices, notwithstanding the independent board of Ben & Jerry’s right to make decisions about the brand’s social mission.

Ben & Jerry’s claimed in its lawsuit that its board conducted a special meeting on Friday and decided to sue over the choice after Unilever revealed the sale.

After Unilever’s action last week, the Israeli licensor, Avi Zinger of American Quality Products, said in an interview with CNBC that any prospective legal action would be “between Unilever and Ben & Jerry’s.” I’ve already struck a bargain.

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