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Ben & Jerry’s, Unilever said unable to settle suit seeking to block West Bank sales

Source familiar says sides may still pursue out of court deal; Unilever CEO calls on ice cream firm under its umbrella to focus on other issues ‘without straying into geopolitics’

Pedestrians walk on Church Street, past the Ben & Jerry's shop, in Burlington, Vermont, March 11, 2020. (AP Photo/Charles Krupa)
Pedestrians walk on Church Street, past the Ben & Jerry's shop, in Burlington, Vermont, March 11, 2020. (AP Photo/Charles Krupa)

Talks between ice cream-maker Ben & Jerry’s and its parent company Unilever reportedly broke down Thursday as the parties failed to reach an agreement over a dispute regarding sales to West Bank settlers before a self-imposed deadline passed.

Last month, the Vermont-based firm filed a civil suit in the US Southern District Court of New York against Conopco, the main US branch of the UK-based Unilever, seeking to block the sale of Ben & Jerry’s Israel branch to the local licensee, which would allow sales of its ice cream products in West Bank settlements to continue.

Ben & Jerry’s announced last year that it would cease sales in “occupied Palestinian territory” infuriating Israel and exposing Unilever to a flood of sanctions and legal troubles.

The move was set to come into effect at the end of 2022, when Ben & Jerry’s contracts with Avi Zinger, the owner of Ben & Jerry’s Israel, were due to expire. Instead, Unilever reached a deal to sell the unit to Zinger and his company American Quality Products (AQP), sparking the suit from the Vermont-based confectioner.

Ben & Jerry’s and Unilever agreed in mid-July to reach an out-of-court agreement and set a Thursday deadline for doing so.

But the sides remained at an impasse, a source familiar with the matter told Reuters, in what will ostensibly bring the dispute back to the court for a judge to decide. However, the source said Ben & Jerry’s and Unilever may still try and reach an agreement on their own.

During the mediation earlier this week, Unilever CEO Alan Jope insisted that Ben & Jerry’s “long-term future” is “squarely as part of Unilever,” the source said.

Screen capture from video of Unilever CEO Alan Jope, December 2020. (YouTube)

“There is plenty for Ben & Jerry’s to get their teeth into in their social justice mission without straying into geopolitics,” the source quoted Jope as having added.

Spokespeople for Ben & Jerry’s and Unilever did not immediately respond to requests for comment.

The June 29 agreement with Zinger would give him permanent independence to continue sales in Israel and the West Bank with the Ben & Jerry’s logos in Hebrew and Arabic, but not English.

Ben & Jerry’s now seeks an injunction to prevent the move, as well as damages from the agreement and all profits Unilever makes from it. Ben & Jerry’s had previously said it would no longer profit from sales in Israel.

The court had denied Ben & Jerry’s request for a temporary restraining order and preliminary injunction against Unilever’s agreement with Zinger.

In response to the lawsuit, Unilever told The Times of Israel it “had the right to enter this arrangement. The deal has already closed. We do not comment on pending litigation.”

Pro-Israel demonstrators protest against Ben and Jerry’s over its boycott of the West Bank, and against antisemitism, in Manhattan, New York City, on August 12, 2021. (Luke Tress/Flash90)

Unilever and Ben & Jerry’s have been out of sync on the settlement boycott since the start and seemed to have been increasingly at odds. The legal filing appeared to be the first direct legal dispute between the two sides.

The dispute focuses on the autonomy of the Ben & Jerry’s board and its commitment to its “core values” and social mission, which the company says is integral to its identity and business success. Ben & Jerry’s says its owners violated agreements related to its board and social commitments by transferring the brand to the Israeli branch.

When Unilever acquired Ben & Jerry’s in 2000, it granted the board autonomy “for safeguarding the integrity of the essential elements of the Ben & Jerry’s brand-name,” the lawsuit said. The Ben & Jerry’s board made the West Bank boycott announcement independently of Unilever. The UK-based multinational wholly owns Ben & Jerry’s and has some authority over financial and operational matters, but the ice cream maker retained its independence on other issues in the acquisition agreement.

Ben & Jerry’s said its progressive ethos is integral to the company and its business success, tracing its “social mission” back to its Jewish founders, who decided to make the business “more than just an ice cream company” in the early 1980s.

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