Texas and Florida intrude in Israel’s dispute with Ben & Jerry’s over the boycott within the West Financial institution

A view of the entrance to the ice cream parlor in the Ben & Jerry’s factory in Be’er Tuvia in southern Israel on July 21, 2021.

Emmanuel Dunand | AFP | Getty Images

The struggle between Israel and Palestinians spills over to 30 US states whose laws prevent pension funds from investing in companies that refuse to do business with the Jewish state.

The most recent example concerns the socially conscious ice cream brand Ben & Jerry’s, the West Bank, Texas and Florida.

Earlier this week, Ben & Jerry’s board of directors said it would no longer allow sales in areas that it believes Israel should not control. The company issued a statement stating, “We believe it is inconsistent with our values ​​for Ben & Jerry’s ice cream to be sold in the Occupied Palestinian Territories.”

The company, now owned by global consumer giant Unilever, has been selling its brand in Israel through a local Israeli distributor for decades. Unilever said it would seek a new deal to sell ice cream in Israel, but not in territories claimed by Palestinians for their own state. On Thursday, Unilever CEO Alan Jope said the company was “still fully committed to our business in Israel”.

In Israel, companies are prevented from treating customers and subsidiaries differently in what Israel calls “disputed territory” from what much of the world recognizes as Israeli territory. Israeli Prime Minister Naftali Bennett this week promised to act “aggressively” on the ice cream company founded in 1978 by Ben Cohen and Jerry Greenfield, who are Jewish and progressive.

The American flag and the Texas State Flag flutter over the Texas State Capitol in Austin, Texas.

Brian Snyder | Reuters

Now Texas and Florida are involved.

A spokesman for GOP Texas Governor Greg Abbott told CNBC on Tuesday evening, “Ben and Jerry’s decision to boycott parts of Israel is a shame and an insult to America’s closest allies in the Middle East.” The statement went on to say, “Unilever, the parent company of Ben and Jerry, must reverse this ill-conceived decision.”

Abbott signed a law four years ago that would force Texas pension funds to divest companies that are boycotting Israel.

State auditor Glenn Hegar, who controls billions of dollars in assets for Texas public pension funds, has already told his office to take action. In a statement to CNBC, he said, “I have directed my employees to determine whether certain actions by Ben & Jerry’s or Unilever would trigger inclusion in Chapter 808 of the Texas Government Code,” the law passed in 2017.

It is also possible that sales in states with anti-boycott laws could be affected. If Ben & Jerry’s or Unilever bid for a contract with a public agency, they could be disqualified if the boycott becomes a reality.

Florida State CFO Jimmy Patronis, who controls the public retirement funds, told CNBC that his office is already discussing the issue.

In a letter to Ben & Jerry CEO Matthew McCarthy, Patronis wrote on Thursday: “I believe that Ben & Jerry’s brazen refusal to do business in Israel will lead to your inclusion on the list of companies audited, who boycott Israel. “

The letter, seen by CNBC, also said the state would then “be prohibited from investing in Ben & Jerry’s or its parent company Unilever”.

Inclusion on the list also means the company cannot enter into or renew any contracts with any state or municipality in Florida.

Airbnb was the last company involved in a similar problem. In 2018, the rental site announced that it was banning the listing of Israeli property in the West Bank, an area that Palestinians claim should be part of their state.

An Airbnb listing in Israel

Airbnb

But the company turned around a few months later and was now looking at listings on a “case-by-case” basis, according to a statement on its website.

Ben & Jerry’s board of directors, who have a unique agreement with parent company Unilever that allows for an oversized role in decision-making on social issues, initiated the withdrawal from Israel this week.

Following the Ben & Jerry statement, Unilever released its own on Monday saying, “We remain fully committed to our presence in Israel, where we have invested in our people, brands and business for decades.” In addition, the Unilever CEO spoke to Bennett this week. Following the interview, Israel’s new prime minister said: “This is an action with grave consequences, including legal consequences, and Israel will take vigorous action against any boycott directed against its citizens.”

Ben & Jerry chairman Anuradha Mittal has not responded to CNBC about the implications of the decision and the possibility of divesting Unilever’s state pension funds. In a telephone interview on Thursday, Ben & Jerry’s spokesman Sean Greenwood said, “The company has nothing to add beyond the original statement,” which was released on Monday.

Speaking to NBC News earlier this week, Mittal went after Unilever for making its own statement on the subject, calling it a “deception”. She added, “I can’t stop thinking this is what happens when you have a board with all the women and people of color pushing to do the right thing.”

Unilever did not respond to CNBC calls or emails asking for a response to the possibility of a sale by state pension funds.

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