Sure, Ben & Jerry’s got about a day’s worth of publicity, but at what cost to its parent company?
Recall this summer when the announcement went out that the upscale ice cream brand Ben & Jerry’s was taking a stand and ending its business arrangement in Israel over its supposed illegal occupation of Palestine territory? The company garnered some initial attention in the press, and the titular partners were even granted a New York Times op-ed to detail the move, even calling it “one of the most important decisions the company has made in its 43-year history.”
There is more going on unreported following this brief media adulation — that important decision by the company may also become one of the costliest. While Ben & Jerry’s was initially hailed by many journalists when the press release was sent out, few actually looked at the announcement critically and even fewer have followed up on the aftermath. Either action delivers telling results.
First, the announcement sounded more like bluster once you looked into the details. The severing of the agreement would not be taking place until the end of 2022, due to existing contracts. Additionally, Israel would not be left without frozen confections, as the parent company Unilever would still maintain other supply chains in the country. As for the support of the Palestinians, this too was problematic because by pulling out of the Occupied Territory and cutting business ties, the Palestinians would no longer have access to Ben & Jerry’s products, as they were supplied by Israel.
Moving past the flawed boycott decision, we are now seeing some real ramifications and not those intended. While the ice cream maker was purchased by the multinational in 2000, there were some unique arrangements that permitted an ongoing level of autonomy. This is how the always-activist confectionary purveyor has continued to be a vocal presence in many activist news stories to this day. But that freedom is now literally coming at a price.
The state of New Jersey just announced that as a result of this move by the Ben & Jerry’s brand, its Division of Investment will be ending any investments its pension program has with Unilever. Between stocks and bonds, this can amount to a total in excess of $180 million. The key factor here is that New Jersey is simply the latest state to make such an announcement.
Soon after the initial boycott, the state of Florida quickly announced it was taking action as a result, with Governor Ron DeSantis pointing to state law indicating it will not do business with any company that boycotts Israel. The company was given a 90-day window of compliance, but just yesterday, state pension officer Ash William gave a webcast where he said he expects the divestment to take place next month, as Unilever has shown no intention to take action.
Other states have laws similar to Florida’s that prevent doing business with Israeli boycott corporations. Earlier in September, Arizona came out to say that the state was also going to divest from Unilever from around $143 million in holdings, due to its statutes, and Illinois and Texas have also expressed that those states could also be taking action. 35 states have similar forms of legislation that address companies taking this type of action.
For its defense, Unilever has attempted to take a conciliatory position, while also refusing to take action. After the initial announcement by the ice cream division, Unilever’s CEO said the company supports Israel — but it also supports Ben & Jerry’s. Their wording is decidedly specific.
“Unilever rejects completely and repudiates unequivocally any forms of discrimination or intolerance. Anti-Semitism has no place in any society,” the company’s CEO Alan Jope wrote in a letter to several Jewish organizations. “We have never expressed any support for the BDS movement and have no intention of changing that position.”
That is some precise language employed. They may not have expressed that support of Israeli boycotts, but the company certainly tolerates it. In attempting to assuage anger while at the same time being permissive of its activist ice cream division, Unilever wants it both ways but fails. They try to say the right things, but their inaction speaks louder than words.
“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.”
It will be a while yet before the financial impacts are fully realized, but be sure that some serious dollars are at play. Just the amount of the New Jersey and Arizona divestments is significant in that the totals involved already nearly match what Unilever paid to acquire the ice cream maker — the corporation spent $320 million to purchase Ben & Jerry’s.
As more states join in on the act of pulling investments Unilever may become leveraged to take more action, beyond saying “Meh, what can you do?” while treating its woke problem company like a truant teen.