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Ben & Jerry's withdraws sales from Israeli settlements but clashes with parent company Unilever

"We want this company to be led by values and not be dictated by the parent company,” said the chair of Ben & Jerry's board.

The board of Ben & Jerry's has clashed with its parent company, Unilever, over the handling of the withdrawal of its products from Israeli settlements.

Ben & Jerry's released a statement Monday announcing that it would stop selling its ice cream in the occupied territories.

"We believe it is inconsistent with our values for Ben & Jerry's ice cream to be sold in the Occupied Palestinian Territory," the statement said.

Withdrawing the product requires the ending of a license agreement with a local franchisee who has distributed Ben & Jerry's in Israel since 1987. Through the franchise, the company has a manufacturing facility and two scoop shops south of Tel Aviv. However, the company's ice cream is also sold in grocery stores in Israeli settlements in the West Bank, which the U.N. Security Council has said are a "flagrant violation under international law."

The licensing agreement expires in December 2022, and Unilever will not renew it, the company said.

"Although Ben & Jerry's will no longer be sold in the OPT, we will stay in Israel through a different arrangement. We will share an update on this as soon as we're ready."

Image: Ben & Jerry's
Ben and Jerry's ice cream at an event where founders Jerry Greenfield and Ben Cohen gave away ice cream to bring attention to police reform at the Supreme Court in Washington on May 20.Kevin Dietsch / Getty Images file

Tensions mount between Unilever and the board

The Ben & Jerry's board had been pushing to withdraw ice cream sales from the occupied territories for years, said the board's chair, Anuradha Mittal. However, it wanted to release a different statement, reviewed by NBC News, that made no reference to continued sales in Israel — a decision that Mittal said would require board approval — and highlighted the company's commitment to social justice.

Unilever released the statement against the wishes of the board and in violation of a legal agreement made when it bought Ben & Jerry's in 2000, Mittal said.

"I am saddened by the deceit of it," Mittal said. "This is not about Israel. It is about the violation of the acquisition agreement that maintained the soul of the company. I can't stop thinking that this is what happens when you have a board with all women and people of color who have been pushing to do the right thing."

When Unilever acquired Ben & Jerry's in 2000, the companies crafted an unusual acquisition agreement that legally vested an independent board with control over the ice cream company's social mission, brand integrity and policies. That means the board has to approve any changes to the product, licensing deals, new markets and social mission statements.

"It's an amazingly unique acquisition agreement and really ties the hands of the CEO and Unilever," Mittal said. "It was designed so that a progressive business could ensure its independence and protect its values when acquired by a large corporation."

While it is possible for Ben & Jerry's to remain in Israel through a different arrangement, the Ben & Jerry's board would have to vote to approve the arrangement, which it has not done yet, Mittal said.

The board said in a separate statement: "The statement released by Ben & Jerry's regarding its operation in Israel and the Occupied Palestinian Territory (the OPT) does not reflect the position of the independent board, nor was it approved by the independent board. By taking a position and publishing a statement without the approval of the independent board on an issue directly related to Ben & Jerry's social mission and brand integrity, Unilever and its CEO at Ben & Jerry's are in violation of the spirit and the letter of the acquisition agreement."

Referring to Unilever's attempt to override the board's decision, Mittal said: "They are trying to destroy the soul of the company. We want this company to be led by values and not be dictated by the parent company."

Unilever did not immediately respond to a request for comment on the allegations. It highlighted in a separate statement Monday that it remains "fully committed to our presence in Israel, where we have invested in our people, brands and business for several decades."

"We have always recognized the right of the brand and its independent board to take decisions about its social mission. We also welcome the fact that Ben & Jerry's will stay in Israel," the statement said.

Mittal said, "It is stunning that they can say that when the statement was put out without the approval of the board."

Advocacy groups have been pushing Ben & Jerry's

Ben & Jerry's has faced a 10-year campaign spearheaded by Vermonters for Justice in Palestine, a pro-Palestinian advocacy group. The group argues that the sale of Ben & Jerry's products in the occupied territories is at odds with the company's stated progressive values and social mission to "eliminate injustices in our local, national and international communities by integrating these concerns in our day-to-day business activities."

"By doing business in Israel and in illegal settlements in the occupied Palestinian territory it violates its own social mission and engages in unethical practices," the organization says on its website.

Mittal said that the board passed a resolution to end sales of Ben & Jerry's products in Israeli settlements last July but that the company's CEO, Matthew McCarthy, whom Unilever appointed in 2018, "never operationalized it."

NBC News has not independently reviewed the resolution.

The international nonprofit organization Human Rights Watch has said for years that companies that operate in the settlements are complicit in human rights abuses.

"Our recommendation for businesses is to evaluate their operations and to understand the ways they can be benefiting from and contributing to human rights abuses in settlements," said Omar Shakir, Israel and Palestine director of Human Rights Watch.

Pressure on Ben & Jerry's intensified in May as violence escalated between Israel and Hamas, the militant group that governs the Gaza Strip. Since then, the company has remained silent on social media in the face of criticism from pro-Palestinian activists. Before May 18, the company posted almost daily to its Facebook, Twitter and Instagram pages.

In late June, the nonprofit advocacy group SumOfUs added to the pressure with an online petition calling on Ben & Jerry's to "stop supporting apartheid in Palestine."

"Ben & Jerry's has been one of the world's most progressive companies since its inception, but they continue to sell and operate on stolen Palestinian land," says the petition, which gathered more than 35,000 signatures after it launched Thursday.

Mittal said that throughout that period, the board has pushed to release a statement pledging to withdraw Ben & Jerry's products from Israeli settlements but that senior executives at Unilever became heavily involved because of the decision's political sensitivity.

The company has taken progressive stances on other issues

Ben & Jerry's has a history of making strong statements in support of racial and social justice.

"One of the questions I get most often is aren't you afraid of alienating consumers by the stands that you take at Ben & Jerry's?" McCarthy, the CEO, told The Wall Street Journal in early May. "It's the exact opposite."

In 2016, the company voiced its support for Black Lives Matter in a blog post that said "to be silent about violence and threats to the lives and well-being of black people is to be complicit in that violence and those threats." The post, which explicitly mentioned the police shooting of a man in Charlotte, North Carolina, triggered backlash, with some people threatening to boycott the brand. Since then, the company has made strong statements about the rights of refugees, how the criminal justice system has failed transgender Americans and, in the wake of George Floyd's murder by a police officer in Minneapolis, dismantling white supremacy.

Other companies under pressure for doing business in the occupied territories include the baked goods company Pillsbury. In April, Charlie Pillsbury, whose ancestor Charles A. Pillsbury founded the company, wrote an op-ed in the Star Tribune of Minneapolis calling for a boycott of the brand, which is now owned by General Mills, for having a factory in an Israeli industrial zone in occupied East Jerusalem.

"As long as General Mills continues to profit from the dispossession and suffering of the Palestinian people, we will not buy any Pillsbury products," he wrote, calling on others to join the boycott.

General Mills spokesperson Kelsey Roemhildt said the company has a "longstanding commitment to protecting human rights throughout our supply chain."

"We provide every employee with full social benefits without prejudice to race, religion or nationality. Nearly half of the workers at our supplier's facility are Palestinian, and many have been employed for several years, working alongside Israeli colleagues and reporting continuing satisfaction," Roemhildt said.

In 2018, Human Rights Watch ran a campaign to get Airbnb, and other property rental services to stop listing places in the settlements in the occupied West Bank.

"Airbnb has never boycotted Israel, Israeli businesses, or the more than 20,000 Israeli hosts who are active on the Airbnb platform," Airbnb said in a statement at the time. "We have always sought to bring people together and will continue to work with our community to achieve this goal."

Airbnb withdrew the listings but later reversed the decision after it was served with a lawsuit in a San Francisco court that argued that it discriminated against Jewish people.

"Many companies are navigating adherence to business and human rights standards and balancing that with concern about blowback on the other side," Shakir said. "We think they should treat Israel-Palestine the way they treat human rights abuses elsewhere rather than having a special rule because it might get you in trouble."