By divesting from Israel, Ben & Jerry’s did more than end the sale of ice cream in the occupied Palestinian territories. As the leading brand, Ben & Jerry’s is the face of the U.S. ice cream – a $19 billion U.S. market. Its divestment not only signals a significant economic impact but also a strong ethical stance in the human rights discourse at large. It bolsters Palestinian advocacy efforts and increases international pressure for policy reform.

“We believe it is inconsistent with our values for our product to be present within an internationally recognized illegal occupation,” wrote Ben & Jerry’s in a statement. Corporate divestments from Israel not only shift significant financial resources but also set precedents for other investors and reflect growing societal concerns about corporate responsibility in geopolitical conflicts.

What Is Divestment?

Divestment is the process of selling off assets for either financial, ethical or political reasons. In the context of the Israel-Hamas war, divestment refers to the withdrawal of investments from companies or entities operating in Israel or the occupied Palestinian territories.

Anyone who has watched the news in recent months has seen students at major universities calling for divestment. Protestors at Columbia University, for example, have a long list of divestment targets, demanding the college disclose and divest from companies like Amazon, Google and Airbnb.

Other major corporations, including Hudson’s Bay Company and UniCredit, have also announced divestments. To understand the significance of major corporate divesting from Israel, let’s consider Ben & Jerry’s as a case study.

Impacts of Ben & Jerry’s Divesting from Israel

Ben & Jerry’s divestment from the occupied Palestinian territories represents a strong ethical stance, influences public discourse, interacts with complex legal and political frameworks and applies economic pressure. This move highlights the potential for businesses to impact global human rights and policy issues through their investment decisions.

The Ben & Jerry’s divestment has placed economic pressure on Israel with an impact on both U.S. and Israeli economies and contributed to a broader social and political discourse around Israel’s occupation of Palestinian territories.

Economic Pressure on Israel

Ben & Jerry’s divestment from Israeli-occupied Palestinian territories puts economic pressure on Israel by challenging the legitimacy of its occupation and potentially promoting other companies or countries to reconsider their business ties.

The tangible economic pressure from divestment involves a combination of direct financial losses, disruptions in supply chains, impacts on local employment, stock market reactions, regulatory costs and changes in consumer behavior. Collectively, these pressures incentivize changes in policies and practices, aligning business operations with human rights considerations.

Impact on Israel and the US Markets

In Israel, the decision led to increased support for local ice cream brands and alternative suppliers. Local impacts include the reallocation of market share within Israel’s economy, particularly in the affected territories. In the U.S., depending on Ben & Jerry’s political affiliation, many consumers have supported and boycotted the company’s decision, leading to temporary influxes or declines in sales within certain demographics or regions.

The shifts in consumer preferences due to the controversy could have led to short-term changes in market share within the premium ice cream segment. In the past year, Ben & Jerry’s has lost nearly $1 billion in sales. This has allowed competitors like Häagen-Dazs, Baskin-Robbins and smaller artisanal brands to see an uptick in sales from consumers boycotting Ben & Jerry’s.

State-Level Regulations That Penalize Companies

The Israeli government lobbied states like North Carolina with anti-BDS (Boycott, Divestment, Sanctions) laws, which penalize companies that boycott Israel, potentially impacting business relations and financial interests. These state-level regulations prohibit state entities from contracting with or investing in companies that participate in boycotts against Israel or Israeli-controlled territories.

Broader Economic and Political Reactions

Human Rights Watch praised Ben & Jerry’s decision to stop selling ice cream in Israeli settlements in the occupied West Bank, urging the U.S. to follow suit in response to human rights abuses. The move by Ben & Jerry’s prompted reactions from various political and business entities. Israeli officials and pro-Israel groups in the U.S. pushed back strongly, labeling the move as economic terrorism and antisemitic. They warned of broader economic ramifications, including potential boycotts of Unilever products and strained business relations between U.S. entities and the company​.

​​In summary, Ben & Jerry’s divestment from the occupied Palestinian territories not only applies economic pressure but also reflects a strong moral position, influences public discourse and interacts with complex legal and political frameworks in the name of human rights advocacy.

– Sheridan Smith

Sheridan is based in Madrid, Spain and focuses on Business and New Markets for The Borgen Project.

Photo: Flickr