A federal judge in New York has dismissed a lawsuit filed by a group of shareholders against Unilever, the parent company of Ben & Jerry’s, over the ice cream maker’s decision to stop selling its products in Israeli settlements in the occupied Palestinian territories.
The lawsuit, filed in June 2022 by a pension fund for fire and police in the Michigan community of St. Clair Shores, claimed that Unilever misled investors by not disclosing Ben & Jerry’s board’s resolution to boycott the settlements in 2020. The plaintiffs argued that this omission caused Unilever’s share price to drop when Ben & Jerry’s announced its decision publicly in July 2021.
However, U.S. District Judge Lorna Schofield ruled on Tuesday that Unilever was not obligated to disclose the boycott resolution because it had ultimate control over whether to implement it or not. She said that Unilever retained authority over Ben & Jerry’s financial and operational decisions when it acquired the ice cream company in 2000, while Ben & Jerry’s board only oversaw its social mission.
Schofield said that the delay in announcing the board’s resolution was likely “to determine what, if anything, to do about it.” She also noted that Unilever’s share price recovered quickly after the initial drop and that the plaintiffs failed to show any causal link between the boycott announcement and their alleged losses.
An attorney representing the pension fund and a Unilever spokesperson did not immediately respond to requests for comment.
Ben & Jerry’s faces backlash from Israel and its supporters
Ben & Jerry’s decision to stop selling its ice cream in the Israeli settlements, which are considered illegal by most of the international community, sparked a backlash from Israel and its supporters. Some Jewish groups accused Ben & Jerry’s of antisemitism, while some U.S. states reviewed their relationships with Unilever under anti-boycott laws.
Israel’s Prime Minister Naftali Bennett called Ben & Jerry’s move “a glaring anti-Israel measure” and vowed to fight it “with all our might.” Israel’s Ambassador to the U.S. Gilad Erdan urged 35 U.S. governors to sanction Unilever under their state laws that prohibit doing business with entities that boycott Israel or its settlements.
Ben & Jerry’s, which was founded in 1978 by two Jewish entrepreneurs who have long positioned themselves as socially conscious, said in July 2021 that selling ice cream in the occupied Palestinian territories was “inconsistent with our values.” The company also said that it would continue to operate in Israel through a different arrangement.
Unilever sells its stake in Ben & Jerry’s Israel
In 2022, Unilever sold its interest in Ben & Jerry’s operations in Israel to a local partner, Regency Holdings Ltd., which agreed to distribute the ice cream products throughout Israel, including the settlements. The Vermont-based ice cream maker sued to block the sale, claiming that it violated its agreement with Unilever and undermined its social mission.
The companies settled the dispute in December 2022, with Unilever agreeing to pay $10 million to Ben & Jerry’s Foundation, a charitable organization that supports grassroots activism and social justice causes. The settlement also allowed Ben & Jerry’s to appoint an independent monitor to ensure that its products are not sold in the settlements.
Unilever said that it respected Ben & Jerry’s right to take decisions about its social mission and that it remained committed to its presence in Israel. It also said that it hoped that the settlement would enable both parties to move forward positively.
