A bowl of Ben and Jerry’s ice cream, made by Unilever Plc.
Chris Ratcliffe | Bloomberg | Getty Images
Ben & Jerry’s is suing parent Unilever to stop selling its Israeli business to a local licensee, a move the consumer products giant said would keep ice cream products available in Israel and the occupied territories.
Ben & Jerry’s said in a lawsuit filed in federal court in New York on Tuesday that Unilever’s decision was made without the approval of its independent board of directors, which has the primary responsibility to protect the integrity of its brand name.
A judge on Tuesday denied Ben & Jerry’s request for a temporary restraining order, but ordered Unilever to show why a preliminary injunction had not been issued by July 14.
Representatives for Unilever and Ben & Jerry did not immediately respond to requests for comment.
The lawsuit represents the latest development in the controversy that erupted last year when Ben & Jerry’s said it would halt sales in the West Bank occupied by Israel since the 1967 Six-Day War.
The government of Israel considers the occupied territories part of its economy, and any efforts to boycott business in these areas are seen as applying to the country. Stopping the sale of ice cream in the occupied territories would have ended sales throughout Israel.
Ben & Jerry said in the lawsuit that its brand is “synonymous with social activism” and that as part of its acquisition of Unilever in 2000, it retained “primary responsibility for protecting the integrity” of the Ben & Jerry’s brand through its independent board of directors.
She said Unilever has publicly recognized the brand’s right to make decisions about its social mission. But then last week, Ben & Jerry’s said Unilever had “suddenly reversed course”.
Unilever announced last week that it had sold the Israeli branch of its Ben & Jerry business to American Quality Products, which licenses ice cream products in Israel. American Quality said it will continue to sell Ben and Jerry’s products under Hebrew and Arabic names throughout Israel and the occupied territories.
Although Ben & Jerry’s independent board of directors have the right to make decisions about the brand’s social mission, Unilever said in its announcement of the sale that it had the right to enter into the agreement because it retained primary responsibility for financial and operating decisions.
After Unilever announced the sale, Ben & Jerry said in its lawsuit that its board of directors held a private meeting on Friday and voted to sue the decision.
In an interview with CNBC after Israel’s Unilever’s move last week, Avi Zinger of American Quality Products said any potential lawsuit would be “between Unilever and Ben & Jerry. I already have a deal.”
CNBC’s Candice Choi contributed to this report.