August 3, 2021 | Insight

Analysis of Unilever Letter on Ben & Jerry’s BDS Activity

August 3, 2021 Insight

Analysis of Unilever Letter on Ben & Jerry’s BDS Activity

Unilever CEO Alan Jope sent a letter to major Jewish organizations in the United States and the United Kingdom on July 27, 2021, in an effort to defend the company’s decision earlier last month to terminate its Ben & Jerry’s licensee in Israel in a manner consistent with the global Boycott, Divestment, Sanctions (BDS) campaign to isolate the Jewish state. While the letter contained several statements apparently designed to soften opposition to Unilever’s Israel boycott, the letter’s substance contained several apparently misleading assertions.

The opening sentence in Jope’s letter is a perfect example of Unilever’s obfuscation. “I am writing to you concerning the decision of Ben & Jerry’s and its independent Board to stop selling ice cream in the West Bank, from the end of next year,” he declared. Jope wrote as if Ben & Jerry’s is not a brand owned by Unilever, but rather a separate company over which Unilever has no control. Unilever’s most recent annual report, however, identifies Ben & Jerry’s Homemade Inc. as a wholly owned subsidiary. Indeed, it has been reported that Unilever itself is the licensor of the Ben & Jerry’s brand in Israel.

While Unilever wants to blame the Ben & Jerry’s boycott of Israel on a so-called “independent Board,” Unilever reportedly is the sole shareholder and owner of Ben & Jerry’s and made a conscious choice to implement a boycott of Israel. Jope’s letter very carefully avoids claiming otherwise. His letter appears deliberately worded to avoid a blanket statement that Unilever has a legal obligation to terminate the Ben & Jerry’s license in Israel. He instead wrote that “we have always recognized the right of the brand and its independent Board to take decisions in accordance with its social mission. On this decision, it was no different.”

Jope’s letter also contains statements aimed at dispelling the notion that Unilever is engaging in BDS — which it is. Jope wrote that “Ben & Jerry’s has also made it clear that although the brand will not be present in the West Bank in 2023, it will remain in Israel through a different business arrangement.” He claimed that “Unilever rejects completely and repudiates unequivocally any form of discrimination or intolerance,” and that the company has “never expressed any support for the Boycott Divestment Sanctions (BDS) movement.”

These statements are extremely disingenuous. U.S. federal law defines the geographic scope of the terms “boycott of, divestment from, and sanctions against Israel” to include actions that “are politically motivated and are intended to penalize or otherwise limit commercial relations specifically with Israel or persons doing business in Israel or in any territory controlled by Israel.”

In Illinois, whose anti-BDS legislation was used as a model for similar laws in many other states, “boycott Israel” means “engaging in actions that are politically motivated and are intended to penalize, inflict economic harm on, or otherwise limit commercial relations with the State of Israel or companies based in the State of Israel or in territories controlled by the State of Israel.” The chair of the relevant Illinois Investment Policy Board committee has already expressed concern that Unilever has done precisely that to its Israel-based licensee. He has also stated that if Unilever is confirmed to have engaged in such a boycott, Illinois law would require divestment from Unilever and all its subsidiaries.

Additionally, Jope’s statement that Ben & Jerry’s will remain in Israel after 2022 without selling in the West Bank appears to be misleading. According to a letter signed last week by over two-thirds of Israel’s parliament, the Ben & Jerry’s decision “violates the laws of the State of Israel: The Prohibition of Discrimination in Products Law and the prohibition of boycotting various areas of the country.” Unilever likely knows this full well; its current licensee reportedly refused to halt such sales, leading Unilever to refuse to renew the license.

What Unilever may not have realized prior to its Ben & Jerry’s announcement is that its decision to boycott Israel might run afoul of 33 U.S. state anti-boycott laws, resolutions, and executive orders — potentially triggering hundreds of millions of dollars in direct divestment from Unilever stock by state pension funds, alongside potential second-tier effects in the form of indirect divestment by mutual fund and index fund managers.

States such as Illinois, New Jersey, Texas, and Florida, which have laws requiring their public pension funds to divest from companies that boycott Israel — and other U.S. states that blacklist such companies from receiving state procurement contracts — are unlikely to be deterred by Jope’s letter. Unless Unilever reverses its Ben & Jerry’s decision, the company and all its affiliates will likely be added to state-based prohibited company lists in the months ahead.

Richard Goldberg is a senior advisor at the Foundation for Defense of Democracies (FDD), where Orde Kittrie is a senior fellow and David May is a research analyst. They all contribute to FDD’s Center on Economic and Financial Power (CEFP) and Israel Program. For more analysis from the authors, CEFP, and the Israel Program, please subscribe HERE. Follow the authors on Twitter @rich_goldberg and @ordefk and @DavidSamuelMay. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

Israel Lawfare Palestinian Politics