US judge weighs Ben & Jerry’s claims against owners over Israeli business

NEW YORK, Aug 8 (Reuters) – A US judge expressed skepticism on Monday that Ben & Jerry’s deserved an immediate injunction against its parent Unilever Plc to restrict marketing of its ice cream in the Israeli-occupied West Bank, Ben said & Jerry’s said was against his values.

US District Judge Andrew Carter said at a court hearing in Manhattan that he was not sure Ben & Jerry’s would continue after Unilever’s sale of the ice cream maker’s Israeli business on March 29.

The unusual row highlights the challenges Unilever faces in encouraging its 400-plus brands to have social missions, which the company says help increase sales.

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The independent directors of Ben & Jerry sued Unilever on July 5, almost a year after the maker of Half Baked and Cherry Garcia suffered backlash when it decided to halt sales in the Israeli-occupied Palestinian territories because it “isn’t compatible with its values”. Although the lawsuit also aimed to stop sales altogether, Monday’s hearing focused on whether Ben & Jerry’s deserved an injunction prohibiting Zinger from selling new or rebranded products using its English-language brands.

Ben & Jerry’s attorney, Shahmeer Halepota, told the court that Zinger could make new products with the “exactly opposite stance,” causing consumer confusion.

“Instead of peace pops, you could make ‘tank pops,'” Halepota said, and the shoppers were both seen walking down an aisle at a grocery store.

The judge didn’t rule immediately, but told a Ben & Jerry’s attorney, “I’ve heard nothing that says anything is imminent. It doesn’t seem… something’s going to happen in the next few weeks.”

He did not say when he would rule.

When Unilever bought Ben & Jerry’s in 2000, it gave the brand’s board of directors primary responsibility for overseeing the ice cream maker’s social mission. Ben & Jerry’s board of directors said the sale to Zinger undermines its right to do so. The two people appointed by Unilever disagreed.

“This is an American institution that has built its credibility on this authenticity of social mission for the past 40 years,” Halepota said.

In contrast, Unilever has stated that it retains the right to make operational decisions for Ben & Jerry’s and that the sale cannot be reversed as it is irrevocably final.

“There is simply no reason to believe that the continued sale of ice cream could do irreparable damage,” said Unilever’s attorney David Marriott.

Ben & Jerry’s sales surpassed 1 billion euros ($1.02 billion) for the first time last year.

Jeff Furman, who helped start the company and served on the board of directors at Ben & Jerry’s for about 40 years, said the company had never sued Unilever before but considered doing so after noticing quality issues with the ice cream it later sold have been fixed.

“We have our fingers in it — that’s part of the job — being alert and concerned about everything,” he said.

Last week, Ben & Jerry’s said Unilever had frozen its independent directors’ pay. Continue reading

Before the hearing on Monday, a two-week mediation failed to reach an out-of-court settlement. Continue reading

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Reporting by Jonathan Stempel and Jessica DiNapoli in New York; Editing by Grant McCool

Our standards: The Thomson Reuters Trust Principles.

Jessica Dinapoli

Thomson Reuters

A New York-based reporter covering US consumer products ranging from paper towels to packaged foods, the companies that make them and how they are responding to the economy. Previously, he reported on corporate boards and distressed companies.

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