Unilever has sold its Israeli Ben & Jerry’s business to a local licensee in an attempt to draw a line under a bitter spat between the ice cream brand and the government.
The sale to businessman Avi Zinger, owner of American Quality Products, brings to an end a year-long legal battle after Ben & Jerry’s announced last year that it would stop sales in the West Bank and East Jerusalem in an apparent protest at Israel’s occupation.
Ben & Jerry’s said at the time that the sales were “inconsistent with our values” and added that it would not renew its licence with American Quality Products, drawing a furious reaction from the Israeli government and prompting a lawsuit from Zinger.
Zinger has now acquired the business for an undisclosed sum and settled the US federal lawsuit he filed against the UK consumer goods company. The lawsuit had claimed the business was violating US laws governing trade boycotts and relations with Israel.
Since its 2000 acquisition by Unilever, Ben & Jerry’s has retained an independent board that allows it a degree of autonomy on its “social mission”.
Unilever initially said the brand’s policy was made “in line with the acquisition agreement that we signed 20 years ago”. However, the company said on Wednesday that under that 2000 deal it had “reserved primary responsibility for financial and operational decisions and therefore has the right to enter this arrangement” with Zinger.
Unilever said it had listened to “perspectives on this complex and sensitive matter” and believed the sale was the “best outcome”, adding that its review had included consultations with the Israeli government.
Zinger, whose company took on the Ben & Jerry’s licence in 1987, said: “I thank Unilever for resolving this matter . . . There is no place for discrimination in the commercial sale of ice cream.”
“It is a shame it took almost a year to come to this but at least we are here with a happy ending,” he added.
The Israeli government welcomed the decision, saying it “not only ensures that the Ben & Jerry’s factory and its diverse workforce will be protected, but that its customers both Jewish and Muslim, Israeli and Palestinian, will not be targeted by the delegitimisation campaign against Israel”.
A person close to Ben & Jerry’s independent board declined to comment on whether it supported Unilever’s announcement on Wednesday.
Unilever had also faced pressure from activist investor Nelson Peltz, who owns 1.5 per cent of the UK consumer goods group and is joining the board next month.
Peltz’s company Trian Partners said it “commended the Unilever team and Avi Zinger for reaching this new arrangement to keep Ben & Jerry’s in Israel and ensure its ice cream stays available to all consumers”.
Unilever’s move to stop sales had been welcomed by pro-Palestinian groups, but had prompted anger in Israel, including a threat of “severe consequences” from Prime Minister Naftali Bennett.
Additional reporting by Harriet Agnew in London
