Monday, July 26, 2021
Why the Kerfuffle with Ben & Jerry's
Ben Cohen and Jerry Greenfield, two itinerant Jews from New York, found themselves in progressive Burlington, Vermont, joining fellow New York progressive expatriate Bernie Sanders, Mayor of Burlington. Ben and Jerry set up a corner ice cream shop in an abandoned gas station and hit the jackpot. The artery clogging, high butterfat content ice cream was a success. Their appeal as two progressive entrepreneurs helped. Gen Z and Millennials love the ice cream. Ben and Jerry sold Ben and Jerry’s Ice Cream to the multi-national Unilever in 2000 for $325 million. Ben and Jerry’s is unique with its appealing image. The merger of Ben and Jerry’s Ice Cream with Unilever had unusual terms and conditions. Ben and Jerry’s would retain an independent board of directors, perhaps in perpetuity. Unilever agreed to the new subsidiary continuing its social policies “in these critical, global economic and social missions.” Unilever made a Faustian bargain. It could sit back, collect the revenues and profits from Ben and Jerry’s with some occasional blowback. Ben and Jerry’s is the single highest selling ice cream in the United States in 2020 with sales of $863.1 million. That’s what $6/pint can do compared to $4-6/1½ gallon for most branded ice cream. Breyers, another Unilever brand, is the largest seller by volume. Ben & Jerry’s is known for its social activism. It called for President Trump’s impeachment after the January 6 Capitol riots. It’s opposed to GMO products. It’s hypocritical low was after the killing of George Floyd. The almost all white company called out to “dismantle white supremacy in all its forms.” It promoted Black Lives Matter and Occupy Wall Street. Up to one fifth of its advertising budget goes to social causes. Where could go wrong? Ben and Jerry’s joined the BDS Movement last Tuesday. It announced that it will no longer sell its ice cream in the “Occupied Palestinian Territory,” i.e. Gaza, the West Bank, and East Jerusalem. Technically it was cancelling its licensing agreement with its Israeli affiliate when the license expires at the end of 2022. It had asked the licensee to stop selling in the occupied territories – an offer the licensee could not accept because Israeli law forbids boycotts of Israeli citizens, Jewish or Arab, based on their location. Unilever remains “fully committed” to its Israeli business and staying in Israel. CEO Alan Jope said: “Unilever remains fully committed to our business in Israel. This was a decision that was taken by Ben & Jerry’s and its independent board in line with an acquisition agreement that we signed 20 years ago.” He said that, but I assume Unilever’s are flyspecking the purchase agreement looking for a loophole. Good luck with that. Most consumers will not understand the legal distinction. Therein lies a problem for Unilever. It cannot in theory control Ben and Jerry’s, but it has to answer companywide for Ben and Jerry’s. Several Jewish retailers in Jewish neighborhoods have dropped the brand. Several individuals have vowed not to buy Tom and Jerry’s, but who knows? Talk is cheap on social media. If a boycott of Ben and Jerrys, or of Unilever generally, is effective, the company will have to act. It may or may not be able to control the subsidiary, but it can definitely sell it or spin it off. Unilever is heavily invested in Israel and is a large exporter of its products from Israel. It invested over $300 million in Israel over the past decade. Naftali Bennett, Israel’s new prime minister, said Ben & Jerry’s ban will have “serious consequences.” Jews in the U.S. are split on BDS and the settlements, but Israel is overwhelmingly unified on BDS. They view BDS as an existential threat to the country. Israel and Unilever are too heavily intertwined, but changes will occur. I am not a fan of boycotts, a favorite tool of the left. The left has unsuccessfully attempted to get Rush Limbaugh, Sean Hannity, and Tucker Carlson fired by pressuring their advertisers to cancel. Their boycotts of Chick fil-A and backfired with increased sales by those companies. Avi Zinger, CEO of Ben and Jerry’s Israel will survive. 33 American states have enacted anti-BDS statutes that restrict their governments from contracting or investing in companies that boycott Israeli businesses or people. I will continue my personal avoidance boycott of Ben and Jerry’s because I don’t eat the high fat, high calorie, high price ice cream. I’m happy with Breyers and store brands.