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Ben & Jerry’s sues Unilever for blocking Israeli business

CNN business

Ben & Jerry’s is suing its parent company to annul the sale of its Israel business to a local partner that would continue to sell its products in the West Bank.

The Vermont-based ice cream maker filed a lawsuit in U.S. District Court in New York on Tuesday, seeking an injunction against Unilever (UL) “to protect the brand and social integrity that Ben & Jerry’s has built for decades.” .

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, illegal under international law. In July 2021, it announced that it would end sales in the West Bank altogether.

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

Unilever, one of the world’s biggest sellers of consumer goods like Dove soap and Magnum ice cream, tried to put an end to the controversy by announcing last week that it had sold Ben & Jerry’s Israeli business to AQP for an undisclosed amount .

The retail giant said Ben & Jerry’s would be sold under its Hebrew and Arabic names across Israel and the West Bank going forward.

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

As of 2021, Ben & Jerry’s has firmly opposed selling its products in the West Bank, saying it would be “incompatible” with the brand.

In its Tuesday complaint, it found that its brand assets are legally overseen by an independent board under a 2000 agreement with Unilever.

The board decided to pursue legal action at a meeting last week where five directors voted to authorize a lawsuit and two Unilever-appointed people dissented, Ben & Jerry’s said.

In a statement last week, Unilever acknowledged that “Ben & Jerry’s and its independent board have been given the right to make decisions about its social mission.”

However, she claimed that the parent company “retains primary responsibility for financial and operational decisions and therefore has the right to enter into this agreement.”

In a new statement on Wednesday, a Unilever spokesman reiterated that it “has the right to join this agreement”.

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

In its statement last week, Unilever said it had been conducting a review of its operations there “over several months, including with the Israeli government.”

“Unilever has taken the opportunity of the past year to hear opinions on this complex and sensitive matter and believes this is the best result for Ben & Jerry’s in Israel,” it added.

— Jordan Valinsky contributed to this report.