Ben & Jerry’s, Unilever negotiate out-of-court deal over Israeli dispute breakdown, Marketing & Advertising News, ET BrandEquity

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Ben & Jerry’s and its parent company Unilever Plc did not reach an out-of-court settlement over a dispute over the sale of the ice cream maker’s Israeli business to a local licensee, a source with direct knowledge said, sending the issue back to a federal judge.

The maker of Chubby Hubby ice cream sued Unilever this month to block the sale of the Israeli business to licensee, Avi Zinger, saying that Unilever gave Ben & Jerry’s the rights to protect its brand when it bought the company in 2000. was guaranteed.

Burlington, Vermont-based Ben & Jerry’s said last year it was ending sales in the Israeli-occupied Palestinian Territories because it was “inconsistent” with its values, a move that eventually led to the sale to Zinger.

Ben & Jerry’s and Unilever agreed in mid-July to try to reach an out-of-court settlement by July 28.

One source said the talks did not work out because Ben & Jerry’s does not want to “cave down” on its social mission and stance on Palestinian human rights.

The dispute between Ben & Jerry’s and Unilever has tested the limits of how far global consumer products and food manufacturers will go in allowing their brands to have a social mission. Giving brands a “purpose” and a mission to “do well” has been an important part of Unilever’s overall strategy.

Unilever Chief Executive Alan Jopp said on the company’s quarterly earnings call this week that the “long-term future” of Ben & Jerry’s lies “as a whole as part of Unilever.”

“There’s a lot for Ben & Jerry’s to bring their teeth to their social justice mission without delving into geopolitics,” he said.

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Jopp’s statements were made during the mediation, said the source, who could not be identified as he was not authorized to speak to the media.

Spokesmen for Ben & Jerry’s and Unilever could not immediately be reached for comment. The source said the ice cream maker and Unilever may still try to settle out of court.

Unilever has previously stated that Ben & Jerry’s had the right to make decisions about its social mission. The move was condemned by Israel and some investors sold their stocks or bonds in the company.

The sale of the business to local licensee Avi Zinger would make ice cream products available throughout Israel and the occupied West Bank.

Unilever said it sees net material inflation around €4.6 billion this year, including a hit of €2.6 billion in the second half. Unilever’s first-half operating profit margin fell to 17% from 18.8% a year ago, while Unilever raised prices to 9.8%.

Investors are closely watching Q2 corporate results for signs that economies are heading for a recession. But so far consumers are giving mixed signals.