The board of Ben & Jerry’s aims to work out a ‘new arrangement’ for sales in Israel before the end of the year, Unilever PLC’s CEO said on Thursday, after the US-based independent ice-cream brand committed to halting sales in Israeli-occupied Palestinian territories last year.
“Our absolute focus right now is to figure out what the new arrangement will be for Ben & Jerry’s,” Alan Jope, CEO, said in a conference call with journalists after the company announced earnings.
Jope’s comments were the most specific that he has given about the actions of the ice-cream brand, which is based in the US state of Vermont.
Ben & Jerry’s announced in July that it would halt sales in Israeli-occupied Palestinian territories, sparking a backlash including divestments by some US pension funds.
Quasi-Independent Board
Ben & Jerry’s, which has its own, quasi-independent board under the terms of its 2000 purchase by Unilever, noted that it was ‘inconsistent with our values’ for its product to be sold in those areas. Most countries consider Israeli settlements on occupied Palestinian land to be illegal. Israel disputes this.
Ben & Jerry’s often speaks up on political and social issues. For example, on 3 February, the brand noted on Twitter that the decision of US President Joe Biden to send troops to Europe ‘in response to Russia’s threats against Ukraine only fans the flame of war’.
Jope did not directly criticise Ben & Jerry’s activism, but he said, “On subjects where Unilever brands don’t have the expertise or credibility, we think it’s best that they stay out of the debate.
“Ben & Jerry’s is a great brand. Most of the time, they get it right. They have a great track record of campaigning on important issues that are relevant to their consumers,” Jope added.
Marketing
Investors are watching the ice-cream controversy as a test of Jope’s ability to balance his emphasis on marketing tied to social issues with financial results.
Speaking before Jope’s remarks, Kevin Dreyer, a portfolio manager at the Gabelli Asset Fund, whose parent, GAMCO, owns about 225,000 Unilever shares, said that while many Unilever consumers like its green-labelled products, some political activism by Unilever’s brands could alienate some consumers.
Jope has previously said that Ben & Jerry’s board acted independently, and that Unilever does not support efforts to isolate Israel, where it employs nearly 2,000 people.
‘Values-Led Company’
Ben & Jerry’s announced that it would continue to sell ice cream in Israel ‘through a different arrangement’.
‘We’re a values-led company with a long history of advocating for human rights, and economic and social justice,’ Ben & Jerry’s noted in July, when it announced its sales halt plans.
Ben & Jerry’s accounts for about 3% of the world’s ice-cream market. The brand’s sales grew by 9% last year, Unilever noted, outpacing overall underlying sales growth of 4.5%. The company did not give further details on sales.
“I definitely would not make a connection between those [Ben & Jerry’s] statements and its sales growth,” Jope said in the call.
“The growth that we’re seeing on Ben & Jerry’s is driven much more by their innovation programme,” he added.
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