Ben & Jerry’s social mission isn’t absolute; parent company may reverse board decisions not “commercially reasonable.”
Two major pro-Israel advocacy groups have sent a letter to Unilever, the parent company of the ice cream giant Ben & Jerry’s, arguing that, contrary to its claims otherwise, Unilever could overturn the latter’s decision to boycott the West Bank and eastern Jerusalem.
Ben & Jerry’s stated in July that it will not sell its products in what it called the “the Occupied Palestinian Territory” because it was “inconsistent with our [company] values.” The ensuing backlash has seen a number of US states seek to divest from the company and its multinational parent company Unilever, on the basis of anti-BDS legislation.
In July, Unilever released a statement saying that “as part of the acquisition agreement, we have always recognized the right of the brand and its independent Board to take decisions about its social mission.”
In a letter dated Oct. 15, 2021 addressed to Unilever CEO Alan Jope and the company’s Board of Directors, StandWithUs and the Israeli-American Coalition for Action argued that the “right” referred to by Unilever is not absolute, and the company has the power to overturn Ben & Jerry’s decision.
Unilever’s contract with Ben and Jerry’s, the letter stated, “gives Unilever the power to make ‘financial and operational’ decisions for Ben & Jerry’s; the Board can make ‘social’ decisions only insofar as they are ‘commercially reasonable.’”
“Boycotting an entire country is, in fact, commercially unreasonable,” asserted the letter, “especially when it triggers counter-boycotts by states and consumer groups and divestment of state pension funds” — referring to legal and financial actions taken by various entities in reaction to boycotts of Israel in general and Ben & Jerry’s in particular.
“Ben and Jerry’s must explain — to you and to the investing public — how its social mission requires such a boycott when it signed a contract showing that doing business in Israel was consistent with its social mission,” the letter said. “Clearly, it is Ben and Jerry’s that is in breach, and it is within Unilever’s rights to reverse the Board.”
“Furthermore, as you must know, Israeli law bars boycotts of Israeli citizens based on their location,” it pointed out. “This means that Ben and Jerry’s can stay and sell to all Israelis, or it can leave Israel, but it cannot boycott only some Israeli citizens or communities without violating Israeli domestic law.”
“In light of the foregoing, we expect Unilever to correct its error and use its clear authority under the merger agreement to reverse the Ben and Jerry’s Israel boycott,” the letter concluded.