Crefovi's newsletter: Ben & Jerry’s v Unilever - legal challenge based on the acquisition agreement after disagreement on Israel

Ben & Jerry’s v Unilever: legal challenge based on the acquisition agreement after disagreement on Israel?

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The post-acquisition honeymoon phase is definitely over, between Ben & Jerry’s and its parent company Unilever. The ineluctable fallout had been bubbling below the surface for some time. This is a clear message that ?status quo” positions, on very serious political issues such as human rights’ and international law breaches by Israel in Palestine, are no longer acceptable, both to companies’ boards of directors, brand fans and customers. While the old guard and conservative lobbies try to deny this fact, the Ben & Jerry’s v Unilever legal cases will hold bullies and merely profit-driven management accountable, and force them to change. In the long-run.

1. What is Ben & Jerry’s and why is it a peculiar company?

Ben & Jerry’s Homemade Holdings Inc., trading and commonly known as Ben & Jerry’s, is an American company that manufactures ice cream, frozen yogurt and sorbet.

It’s one of the top premium ice cream brands, on a par with H?agen-Dazs, another famous American ice cream maker.

Ben & Jerry’s was founded in 1978 by two Jewish American friends, Ben Cohen and Jerry Greenfield, in Burlington, Vermont, United States (?US”).

In addition to making awesome ice cream with chunky bits (that’s to accommodate Ben Cohen, who suffers from anosmia), Ben & Jerry’s is known the world over for taking clear and frank stances on current social, environmental and political issues, even when such views have nothing to do with ice cream or dairy products.

So, not only did, and still does, Ben & Jerry’s sign onto environmentalist, political and LGBTQ external campaigns, managed by non-profit and lobbying organisations, but it also launched to market many products with politically progressive messages, such as the ?I Dough, I Dough” chocolate chip cookie dough ice cream, to celebrate the US supreme court’s ruling in support of same-sex marriage, or the ?Yes, Pecan!” flavor, in reference to Barack Obama’s victory in the 2008 US presidential election.

Also, Ben & Jerry’s sources from regional organic dairy farms, uses only milk that does not contain artificial growth hormones, developed chemical-free containers, and makes fair-trade and organic ingredients priorities. It even went to court to win the right to label its ice cream hormone-free.

This is the result of the three-part mission statement devised by Ben Cohen and Jerry Greenfield, from inception, for their business:

• to make the world’s best ice cream;
• to run a financially successful company, and
• to ?make the world a better place”.

As of 2019, Ben & Jerry’s has production facilities in Saint Albans, Vermont, Waterbury, Vermont, Hellendoorn, Netherlands and Be’er Tuvia, Israel.

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2. Why are Ben & Jerry’s and Unilever connected?

In April 2000, Ben & Jerry’s sold itself to food and consumer goods conglomerate Unilever plc (?Unilever”), headquartered in London, United Kingdom (?UK”), for USD326 million, as the latter was looking to add a premium ice cream brand in its portfolio, which would rival H?agen-Dazs.

In the acquisition agreement, entered into between Ben & Jerry’s and Unilever, it is set out that the ?power (is given) to (Ben & Jerry’s) board (of directors), (who will) oversee the social mission of (Ben & Jerry’s) and the ?essential integrity of the Ben & Jerry’s brand”” (the ?Agreement”).

Therefore, while the day-to-day running, and strategic commercial choices, at Ben & Jerry’s, are under Unilever’s control and supervision, the ice cream company retained an independent board of directors, which has full authority over the social mission of Ben & Jerry’s, pursuant to the terms of the Agreement.

Ben & Jerry’s retained independent board of directors described itself as having a responsibility to protect the company’s essential brand integrity and to pursue its social mission.

This peculiar division of power and governance at Unilever’s wholly-owned subsidiary has not been an easy task to implement and maintain, since lots of tension arose between the commercially-driven mindset of Unilever’s management, and the social mission-driven focus of Ben & Jerry’s staff and independent board, over the years.

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Crefovi's live webinar: Ben & Jerry's?v Unilever legal saga

11 November 2022 | 15:30pm London time

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Crefovi's live webinar will begin on Friday 11 November at 15:30pm London time (UK), and will provide an in-depth analysis of the Ben & Jerry's v Unilever legal saga, one of the top corporate law cases in 2022.

You haven’t yet secured your free place for our upcoming webinar on corporate litigation law?

Here is your chance to join?Annabelle Gauberti?on Friday 11 November 2022, 15:30pm London time (UK) as she explores the key points raised by the Ben & Jerry's v Unilever legal proceedings.

In this webinar, our expert speaker will discuss:

• What is Ben & Jerry’s and why is it a peculiar company?
• Why are Ben & Jerry’s and Unilever connected?
• Ben & Jerry’s v Unilever: legal challenges resulting from a deadlock on Israel, and
• Prognosis on who will have the last word pursuant to the acquisition agreement.?

Join live webinar here

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