A tub of Ben and Jerry’s ice cream, produced by Unilever Plc.
Chris Ratcliffe | Bloomberg | Getty pictures
Ben & Jerry’s is suing parent company Unilever for stopping the sale of its Israeli business to a local licensee, a move the consumer product giant said would keep ice cream products available in Israel and its occupied territories.
Ben & Jerry̵[ads1]7;s said in a lawsuit filed in federal court in New York on Tuesday that Unilever’s decision was made without the approval of the independent board, which has the main responsibility for safeguarding the integrity of the brand’s name.
A judge on Tuesday rejected Ben & Jerry’s application for a temporary restraining order, but ordered Unilever to show reasons by July 14 for why a preliminary injunction should not be granted.
Representatives of Unilever and Ben & Jerry’s did not immediately respond to requests for comment.
The suit marks the latest development in a controversy that was launched last year when Ben & Jerry’s said it would halt sales in West Bank territory occupied by Israel since the Six Day War in 1967.
The Israeli government views the occupied territories as part of its economy, and any efforts to boycott the territories are seen as valid for the country. Stopping the sale of ice cream in the occupied territories would have ended sales throughout Israel.
In its case, Ben & Jerry’s said that their brand is “synonymous with social activism” and that as part of the agreement to be acquired by Unilever in 2000, it had reserved “the main responsibility for maintaining the integrity” of Ben & Jerry’s. brand through its independent board.
It said that Unilever had publicly recognized the brand’s right to make decisions about its social mission. But last week, Ben & Jerry’s said Unilever “abruptly changed course”.
Unilever announced last week that it was selling the Israeli branch of Ben & Jerry’s business to American Quality Products, which licenses the ice cream products in Israel. American Quality said it would continue to sell Ben & Jerry’s under Hebrew and Arabic names throughout Israel and its occupied territories.
Despite the right of Ben & Jerry’s independent board to make decisions about the brand’s social mission, Unilever said in the announcement of the sale that they had the right to enter into the agreement because they had reserved the main responsibility for financial and operational decisions.
After Unilever announced the sale, Ben & Jerry’s said in its lawsuit that the board held a special meeting on Friday and voted to sue the decision.
In an interview with CNBC after last week’s move by Unilever, Israeli licensor Avi Zinger of American Quality Products said that any potential lawsuit would be “between Unilever and Ben & Jerry’s. I already have a deal.”
– CNBC’s Candice Choi contributed to this report.