Ben & Jerry's Fights Unilever on Social Justice in the Trump Era

Mint

3 days ago

As the US celebrated Black History Month in February, Ben & Jerry's crafted a social media post on keeping the racial-equality fight going even as President Donald Trump rolled back diversity initiatives.
It never saw the light of day.
The post was nixed by Ben & Jerry's' parent company Unilever Plc, people familiar with the matter said, like others supporting Palestinian refugees, defending the rights of student protesters and calling for a ceasefire in Gaza.
The Anglo-Dutch multinational's actions are raising questions about the future of the campaigning tradition it pledged to protect when it bought Ben & Jerry's a quarter century ago. Since then, a series of Unilever chief executive officers has tried to bring the brand's independent board to heel.
As Unilever prepares to spin off its £15 billion ice-cream business, the Ben & Jerry's board, which defends its right to speak out, has dragged the group to court — fearing its social mission will meet the same fate as the failed product experiments in the label's 'flavor graveyard.'
The battle has turned into a test case for companies' ability to support social causes in the Trump era. Firms ranging from McDonald's Corp. to JPMorgan Chase & Co. have rolled back diversity, equity and inclusion initiatives, and Unilever itself has watered down some of its social and environmental pledges. The blocking of the Black History Month post came just weeks after Trump took office, with companies striving to avoid getting on the wrong side of the new administration.
Court filings and interviews with insiders, former employees and investors show how ugly the tussle between the two sides has become as Ben & Jerry's' board insists it's going to fight the trend.
'Given Ben & Jerry's' history of taking stances on so many issues that pertain to moral and ethical spheres, it would be hard for me to imagine them taking any other stance,' said Dr. Ioannis Ioannou, an associate professor of Strategy and Entrepreneurship at London Business School.
The battle is an ill-timed distraction for Unilever as its spinoff plan gets underway. It wants to get the ice-cream business, which also includes brands like Magnum and Walls, back on track under the watchful eye of activist investor Nelson Peltz.
Unilever plans to run the business as a separate entity named The Magnum Ice Cream Company from July. It says the spinoff, expected later this year, won't threaten the role of Ben & Jerry's' board, with Magnum inheriting the governance structure.
'Investors will want reassurance that there will not be any further fallout,' Barclays said in a note on June 17. 'With the legal dispute still ongoing, there is still some tail risk. We are looking to understand what Magnum's plan and strategy is for the B&J brand going forward.'
Peter ter Kulve, the ice-cream division president and the proposed candidate to be Magnum's CEO, was accused in filings by the Ben & Jerry's board of blocking posts on a Gaza ceasefire and describing an accord to buy almonds from Palestinian farmers as 'forced.' The board questioned 'whether the new entity will adhere to Unilever's contractual commitments.' Ter Kulve, who joined Unilever in 1988, has held senior roles at the group and was 'closely associated with Ben & Jerry's development for many years,' supporting its international expansion, the company said.
The Ben & Jerry's board wants a judge to ratify its social-mission role ahead of the spinoff, while Unilever is seeking to ensure Magnum isn't burdened by legacy issues.
In legal filings as part of a lawsuit that started in November in a New York court, the board accused Unilever of ousting Ben & Jerry's CEO David Stever for encouraging political activism. It also said the group added hurdles to payments for Palestinian produce, is holding back promised charity donations and is muzzling it from speaking out on issues it cares about.
In response to queries from Bloomberg, Unilever said the board's 'recent unnecessarily inflammatory and divisive approach' goes contrary to the spirit of 'Peace, Love & Ice Cream' underlying Ben & Jerry's' product, economic and social mission it has supported for over two decades.
Unilever said in legal filings that it continues to purchase almonds from Palestinian producers and that former CEO Stever resigned and wasn't fired. Stever didn't respond to requests for comment.
The group said it withheld funds from some charities and sought amendments to public statements to avoid being seen as taking sides on the conflict in Gaza or supporting organizations that made divisive comments about Israel. It said it had agreed to a post calling for a ceasefire provided it also condemned terrorism and called for the release of hostages, which it said would align with the position of the late Pope Francis.
In its motion to dismiss the lawsuit, Unilever said the board overstepped its remit and that its directors are making decisions on highly controversial issues at the expense of the group's business. It also said the board doesn't have the authority to bring a legal case on behalf of Ben & Jerry's. The two sides are awaiting a decision from a judge on whether the lawsuit will proceed.
Ben & Jerry's traces its political activism to its beginnings in 1978, when the founders Ben Cohen and Jerry Greenfield — who had been friends since their childhood in Merrick, New York — opened an ice-cream parlor in a renovated gas station in Burlington, Vermont, the home state of left-leaning Senator Bernie Sanders. The maker of such ice-cream flavors as Chunky Monkey and Cherry Garcia has a near-cult following.
Its social agenda is so intimately tied to its identity that the founders expressed an interest in buying the brand back, although Unilever says it's not for sale. Being political is part of Ben & Jerry's brand strategy and 'consumers are aware of this,' says Kimberly Whitler, an associate professor at the Darden School of Business.
'There are some who may buy the product because of the activism and others who buy it despite its activism, but its position is well known,' she said.
When Unilever bought Ben & Jerry's in 2000, the deal included an agreement allowing the ice-cream company to maintain an independent board charged with 'preserving and enhancing' its mission and safeguarding the brand's integrity, Ronald Soiefer, Ben & Jerry's general counsel at the time, said after the deal was done, adding that the agreement would last in perpetuity.
Things functioned relatively well until the Ben & Jerry's board weighed in on Israel, voting in 2021 to end ice-cream sales in the Occupied Palestinian Territory in the West Bank. The move sparked a backlash from Israeli political leaders. It also displeased some investors.
Tom DiNapoli, comptroller in New York, said his state's pension fund was unloading $111 million in Unilever shares because Ben & Jerry's was engaging with boycotting activities. Terry Smith, the founder of Fundsmith and a Unilever shareholder, saw the activism as an example of a focus on issues unrelated to the group's core business.
Unilever eventually sold Ben & Jerry's' intellectual property rights in the territory to its Israeli distributor, who continued selling in the West Bank. It said in legal filings that it's still 'suffering the consequences' of the board's actions, noting that 'Ben & Jerry's and/or Unilever remain on at least nine states' anti-BDS black lists.'
With leadership changes at Unilever, there was a 'fundamental shift' in relations, said Chris Miller, former head of activism at Ben & Jerry's who left earlier this year. While before, the Ben & Jerry's Social Mission team would inform Unilever of potentially controversial activism, it soon turned into an approval process, with Unilever reviewing — and often blocking — content, he said.
'This felt clearly at odds with the spirit of the merger agreement,' he said.
The Ben & Jerry's board says it was barred from posting anything regarded as criticizing the Trump administration without a review. In the UK, where its team worked with organizations helping refugees from Ukraine, Unilever's resistance to a similar push for refugees from Gaza put Ben & Jerry's in an awkward situation with its partners, according to people familiar with the matter.
Unilever said in filings it was sensitive about issuing a statement on Palestinian refugees at the time because Iranian forces had recently attacked Israel, and because of the perception that anti-Israel statements promoted antisemitism.
Although a Reuters report suggested that the group had threatened to halt funding to the Ben & Jerry's Foundation, which makes donations to social-justice organizations, for Unilever, the audit was triggered by the Magnum spinoff plan. The group pays the foundation about $5 million annually, Unilever CEO Fernando Fernandez told reporters in April.
'We have not made any threat,' he said. 'It's our responsibility to ensure that these funds are used properly.'
In its filings, Unilever said the brand's social mission is meant to be 'nonpartisan' and that the independent board doesn't have 'the unfettered right to advocate on any topic it wants on behalf of B&J or to embroil B&J and Unilever in highly controversial and divisive topics that put the businesses and their employees at risk.'
The Ben & Jerry's board for its part says muzzling, suppressing and undermining its activism hurts its reputation with customers.
'Authenticity is a central component of our DNA,' said Anuradha Mittal, the chair of the independent board, adding that the body would 'never allow' Ben & Jerry's to walk away from social-justice issues.
For investors, meanwhile, the spat is unhelpful chatter.
'We would prefer not to have the negative noise,' said David Samra, managing director of Artisan Partners Asset Management Inc, a Unilever investor who supports the group's strategy. Over the long term, growth and profitability are what matter, not the 'short-term noise,' he said.
With assistance from Deirdre Hipwell and Dasha Afanasieva.
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