Unilever investor: Fallout from Ben & Jerry’s boycott will be a ‘lesson’ for multinationals
The fallout from an attempt by ice cream maker Ben & Jerry’s to boycott the West Bank will have a chilling effect on other companies that might consider supporting efforts to economically isolate Israel, an activist investor predicted this week.
Michael Ashner, a longtime corporate activist who bought a stake in parent company Unilever after the boycott was announced and led a group opposed to the move, said other conglomerates should consider the repercussions suffered by the British conglomerate since Ben & Jerry’s announced a boycott of the “occupied Palestinian territories” last year.
The move triggered a massive financial setback for Unilever, as a number of US states have enacted laws requiring them to divest from companies that boycott Israel. The Securities and Exchange Commission has also launched an investigation into Unilever’s response to the boycott. Ben & Jerry’s made the decision to boycott independently of Unilever, which it was able to do as part of its acquisition deal with the corporate giant.
On Wednesday, Unilever and Ben & Jerry’s Israel announced an agreement resolving a federal court case filed by the Israeli supplier that produces and distributes Ben & Jerry’s in the country. The deal grants the Israeli concessionaire the independence to continue operating in Israel and the West Bank, essentially nullifying the boycott.
“Other multinationals will think twice about engaging in BDS activities in the future. That’s the lesson to be learned,” Ashner told The Times of Israel on Thursday.
Ashner has a history of corporate activism with the Winthrop Capital Partners investment group in New York. He said he viewed the boycott as a threat to the Jewish state, a place the US-based investor feels connected to.
“If multinationals could start cutting Israel off because of BDS, that was as dangerous to Israel’s existence as Iran. It’s a very bad slippery slope,” he said. “The first and loudest to do this was Unilever and someone had to confront Unilever, not only because what Unilever was doing was wrong, but to send a message to all other multinationals that this is not a good idea.”
Shortly after the Ben & Jerry’s boycott announcement, Ashner acquired an undisclosed stake in Unilever and began lobbying the board and pushing for legal action in the United States. He formed an organization called the Coalition to Hold Unilever Accountable with a number of law firms, lobby groups and academics.
Ben & Jerry’s is a wholly owned subsidiary of Unilever, despite the independence of its board of directors on certain matters. Unilever is a UK-based conglomerate and one of the world’s largest consumer goods companies, with some 400 brands and a market value of around $116 billion.
They wanted to send the message that the repercussions would be severe from a financial, corporate and stock perspective.
“It wasn’t about ice cream. What if Nestlé decided to cut off Israel? What if Nike, all these other companies? What would that do to Israel’s position in the world? What would that do to him economically? Ashner said.
The group began lobbying US states to pass laws requiring them to divest from companies that support BDS. A number of states pulled nearly $1 billion from Unilever and the company’s value plummeted by more than $20 billion in the months after the boycott was announced, at a time when the market was up. More than 30 states have anti-BDS legislation, and 12 attorneys general and treasurers from seven states have also called on Unilever to reconsider the boycott.
Separately, Ashner and his partners also pushed the Securities and Exchange Commission to investigate Unilever, saying the company failed to properly disclose to investors the risks stemming from the boycott.
Four US House representatives signed a letter to the SEC, including Ritchie Torres of New York and Josh Gottheimer of New Jersey, where Unilever’s US headquarters are located. Ashner warned Unilever of the SEC’s response in correspondence with Unilever management that was seen by The Times of Israel.
On a separate note, Ben & Jerry’s Israel and its owner, Avi Zinger, sued Unilever in US federal court in New Jersey, claiming the company violated US and Israeli laws and unlawfully terminated their business relationship. The dispute finally ended when Zinger and Unilever resolved the matter this week.
“This case has become so much more than Avi Zinger. This has become a case really for the Jewish people as a whole,” said Alyza Lewin, president of the Louis D. Brandeis Center for Human Rights Under Law, which represented Zinger. It was a case that they all felt as a people, so what it did was it motivated people everywhere to step up and do whatever they could do.”
“A lot of people were watching, a lot of people were paying attention, a lot of people were upset or angry,” she said. “It’s like a machine with a lot of different moving parts.”
Ashner said Unilever will likely change its business approach in the future. The company has a progressive corporate ideology, with commitments to causes such as the environment, nutrition and living standards. Ben & Jerry’s has long marketed itself as a liberal and activist company, and when Unilever acquired the ice cream maker in 2000, it allowed Ben & Jerry’s board to make those decisions independently. Unilever has long maintained that it had no control over the boycott decision.
“I think they’re going to have to change their business model,” Ashner said of Unilever. “Shareholders want companies that are profitable and non-controversial. They are not here to buy into an investment controversy like this.
He said prominent investor Nelson Peltz joining Unilever’s board at the end of May was likely a step in that direction, that the company was under pressure on other issues and that it had reached out to States that had divested, as many may be able to reverse the trend. .
He praised Unilever for the deal announced on Wednesday, but said the “real hero” was Zinger, who inadvertently became a face in the fight against BDS.
“I think Unilever believed it was just going to go away and they would be able to deal with Avi on a quiet deal and it didn’t go away,” Ashner said. “He dug in his heels and stayed the course the whole way and I think in his own way he’s heroic for what he’s done.”
Under the terms of its agreement with Unilever, Zinger has the independence to produce and sell Ben & Jerry’s products in Israel and the West Bank in perpetuity. It has exclusive rights to the Hebrew and Arabic brand, but will stop using the English logo.
Ben & Jerry’s said it disagreed with the decision and would no longer profit from ice cream sales in Israel or the West Bank.
The BDS movement said Thursday that Unilever had “succumbed to intimidation” and that the deal “further embeds the company in Israel’s decades-old system of oppression against Palestinians.”
Ashner and her family have previously been involved in philanthropy in Israel and founded the Beit Ruth Therapeutic School for vulnerable women and girls in Afula.
The dispute began after May last year’s war between Israel and terror groups in Gaza, when Ben & Jerry’s said it would no longer allow its ice cream to be sold in Israeli settlements, and also appeared to be doing reference to East Jerusalem. The boycott announcement came after a strong pressure campaign from anti-Israel and progressive activists. The decision sparked an outcry in Israel and among some American Jewish groups, many of whom called it anti-Semitic, as the company does not have a boycott against any other region of the world.
Zinger and his company refused to comply. Their license to sell ice cream was due to expire at the end of 2022, meaning the boycott had not yet gone into effect.
Critics of the West Bank boycott attempt note that Ben & Jerry’s allows its products to be sold in states with abysmal human rights records, including Russia, Saudi Arabia, Syria, Israel, and Russia. Iran and China. The company has taken no action on other disputed territories, including Tibet, Crimea, Western Sahara and Kashmir.
Supporters of the boycott Israel movement say that by urging businesses, artists and universities to sever ties with Israel, they are using nonviolent means to oppose unjust policies toward Palestinians. Israel says the movement masks its motives for delegitimizing and destroying the Jewish state.