Arizona will divest state funds from the parent company of Ben & Jerry’s ice cream, Treasurer Kimberly Yee said.
Yee said the decision was a result of a state law that prohibits Arizona from investing in businesses that participate in boycotts of Israel. She announced the move Tuesday, amid Rosh Hashana.
Arizona reduced its investment in Unilever, Ben & Jerry’s parent company, from $143 million in June to $50 million, and will reduce it to zero by Sept. 21, Yee said in an email to Richard Williams of Unilever Investor Relations.
Ben & Jerry’s had announced earlier this year that it would stop sales of ice cream in the West Bank and east Jerusalem by the end of 2022. The company has said its actions are not a boycott.
“We believe it is inconsistent with our values for Ben & Jerry’s ice cream to be sold in the Occupied Palestinian Territory (OPT). We also hear and recognize the concerns shared with us by our fans and trusted partners,” the company said in a written statement.
Yee, who is running in Arizona’s Republican gubernatorial primary, said that in August she gave Unilever an ultimatum: “Come into compliance with Arizona law or face the consequences. They chose the latter.”
Under Arizona law, the state is prohibited from investing or entering contracts with any person or company that is boycotting Israel. That’s defined as a refusal to deal or perform other actions intended to limit commercial relations in Israel or Israeli-controlled territories.
In a letter to the state, Unilever argued the company’s decision does not reflect an endorsement of the BDS movement, a Palestinian-led effort that supports boycotts, divestments and sanctions against Israel.
“Ben & Jerry’s was acquired by Unilever in 2000. As part of the acquisition agreement, we have always recognized the right of the brand and its independent board to take decisions about its social mission,” the company wrote.
The ice cream company noted that they are still doing business in Israel.
“I can say that we are not boycotting Israel. Although our ice cream will no longer be sold in the Occupied Palestinian Territory, we will stay in Israel through a different business arrangement,” said Laura Peterson, public relations manager for Ben & Jerry’s.
Arizona is one of 35 states that have passed measures aimed to prevent boycotts of Israel, and the majority include ending operations in the West Bank in their interpretation of that.
Arizona’s anti-boycotting law, which also requires organizations that conduct business with the state government to sign a pledge against boycotting Israel, was challenged for its constitutionality in 2017 by Mikkel Jordahl, an Arizona attorney.
In 2018, U.S. District Court Judge Diane Humetewa issued an injunction that blocked it based on First Amendment concerns, and the state appealed. The state Legislature subsequently revised the measure to affect only companies with 10 or more employees and for contracts worth at least $100,000. That made the challenge from Jordahl and his law firm moot.
Gov. Doug Ducey responded to Ben & Jerry’s announcement in July by calling the company’s move “discrimination.”
“Arizona will not do business with a company that boycotts Israel — in 2016 and 2019, I signed bills to make sure of it. Arizona stands with Israel,” Ducey wrote in a Twitter post.
Move unlikely to affect Israeli economy
While Arizona law rejects attempts to “undermine Israel’s economy,” it’s unclear whether the company’s removal of its business will have that effect.
C. Ross Anthony, a senior economist at the Rand Corporation think tank, was an author of a 2015 study on the economic impact of the Israeli-Palestinian conflict that also factored in boycotts.
“I’m not aware that any of them have had a real large effect up to this point on the economic performance of Israel,” Anthony said.
For divestment efforts to have a substantial effect on Israel’s economy, a large number of companies would have to follow suit, he said. The companies that only remove sales in the Israeli-occupied territories pose even less of a threat.
“Israel’s done quite well economically over the past 20 or 30 years and continues to do so and any effect would be from cut back on the amount of international investment going in the country,” Anthony said.
Company’s Jewish founders ‘pro-peace’
Despite government officials’ claims that Ben & Jerry’s actions of limiting their ice-cream sales in Israel are antisemitic or anti-Israel, founders Bennett Cohen and Jerry Greenfield disagree.
The founders, who are both Jewish, wrote an opinion essay for the New York Times in which they describe the company’s actions “not as anti-Israel, but as part of a long history of being pro-peace.”
“But it’s possible to support Israel and oppose some of its policies, just as we’ve opposed policies of the U.S. government,” they wrote. “In fact, we believe this act can and should be seen as advancing the concepts of justice and human rights, core tenets of Judaism.”
Anthony, who also was director of Rand’s Israeli-Palestinian Initiative, said it is imperative to distinguish the difference between antisemitism and political disagreements.
“The anti-Semitism that does exist, and certainly we all should abhor it does exist, is quite different from anybody who might take a position that they don’t approve of a certain policy in any government,” Anthony said.
Reach the reporter at isabella.martillaro@arizonarepublic.com.
