UKLFI: Supporting Israel with legal skills

Unilever Overrules Ben & Jerry’s Boycott

Unilever has dramatically overruled the decision of its Ben & Jerry’s subsidiary to boycott East Jerusalem, Judea and Samaria, dumping its previous line that it had no power to do so.

Unilever’s announcement on 29 June 2022 states that its Ben & Jerry’s business interests in Israel have been sold to Avi Zinger, owner of the current Israel-based licensee, American Quality Products Ltd (AQP). Under the new arrangement Ben & Jerry’s products will be sold under its Hebrew and Arabic names throughout Israel and the West Bank by AQP.

Unilever had previously claimed that “the acquisition [by Unilever PLC] of Ben & Jerry’s in 2000 allowed them to retain its independent board and ability to make decisions in direct opposition to Unilever”.

In a letter of 24 September 2021 to Unilever’s Chief Legal Officer, UK Lawyers for Israel (UKLFI) explained that this interpretation was not correct. UKLFI warned Unilever that its “failure … to assert effective group governance could seriously undermine investor confidence”.

In a further letter sent to the London Stock Exchange (LSE) and the UK Financial Conduct Authority, UKLFI and the Zionist Advocacy Center of New York pointed out that Unilever’s interpretation did not comply with the rules for premium listing on the LSE.

Following the Ben & Jerry’s decision, Unilever’s share price fell substantially as compared with similar companies. Leading investors criticised the Board for pursuing woke gestures instead of focusing on business fundamentals.

Unilever has now announced that it has reached a new arrangement for Ben & Jerry’s which will ensure that the ice cream stays available to all consumers throughout Israel and the West Bank.

The announcement specifically notes that under the terms of the acquisition agreement, Ben & Jerry’s and its independent Board were granted rights to take decisions about its social mission, “but Unilever reserved primary responsibility for financial and operations decisions and therefore has the right to enter this arrangement.”

It adds: “Unilever rejects completely and repudiates unequivocally any form of discrimination or intolerance. Antisemitism has no place in any society. We have never expressed any support for the Boycott Divestment Sanctions (BDS) movement and have no intention of changing that position.”

Unilever’s decision settles legal proceedings brought by AQP with the assistance of the Louis D Brandeis Center and follows a class action brought by the City of St Clair Shores Police and Fire Retirement System for alleged material non-disclosure, as well as decisions by several US States to divest from the company.

A similar outcome was reached in 2019 when Airbnb withdrew its boycott of Jewish customers in East Jerusalem, Judea and Samaria.

Jonathan Turner, Chief Executive of UKLFI, said: “We identified Unilever’s claim to be unable to overrule the Ben & Jerry’s Board as a key issue at the outset. We are pleased to see that Unilever now agrees that it can.”

Avi Zinger told UKLFI: “Thank you, you are part of the success”.