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Texas gets involved in Israel’s fight with Ben & Jerry

Story Highlights
  • The fight between Israel and Palestinians is spilling over into 30 U.S. states with laws on their books preventing pension funds from investing in companies that refuse to do business with the Jewish state.
  • The freshest example involves the socially conscious ice cream brand Ben & Jerry’s, the West Bank and Texas.
  • A spokesman for Republican Gov. Greg Abbott told CNBC: “Ben and Jerry’s decision to boycott parts of Israel is disgraceful and an insult to America’s closest ally in the Middle East.”

The fight between Israel and the Palestinians has spread to 30 US states. Some of these states have laws on their books that prevent pension funds from investing in companies that do not do business with the Jewish state. A new example is Ben & Jerry’s socially conscious ice cream brand in the West Bank and Texas.

Earlier this week, Ben & Jerry’s board said it would not allow sales in territories it does not control anymore. The board released a statement saying it was “incompatible with our values” that the ice cream be sold in the occupied Palestinian territories.

The company, which is owned by global consumer goods giant Unilever, has been selling its brands in Israel to local Israeli distributors for decades. The company said it was seeking a new deal to sell ice in Israel but not in Palestinian territory they claim as their own state. Israeli companies are prevented from treating customers as subsidiaries in an area that is controversial but recognized as Israeli territory by much of the world.

Israeli Prime Minister Naftali Bennett vows this week to crack down on the ice cream parlor founded by Ben Cohen and Jerry Greenfield in 1978, both of whom were Jews and progressive. And now Texas is getting involved.

A spokesman for the Republican governor Greg Abbott told CNBC Tuesday night that Ben & Jerry’s decision to boycott parts of Israel was ‘disgraceful’ and an insult to America’s closest ally in the Middle East. The spokesman also said Unilever, Ben and Jerry’s parent company, would reverse the decision.

Abbott signed a law four years ago forcing Texas pension funds to divest from companies boycotting Israel. In a statement to CNBC, state Comptroller Glenn Hegar, who controls the billions in Texas public pensions, said that Heve instructed his staff to determine whether specific actions of Ben & Jerry’s and Unilever would trigger a listing under Chapter 808 of the Texas government code, which was passed in 2017. His office has instructed his office to take action.

If Ben’Jerry’s and Unilever bid for contracts with public institutions, they could be disqualified if boycott becomes a reality. It is also possible that the sale of the state’s anti-boycott law could have an impact.

Jimmy Patronis, Florida’s chief financial officer who controls state pension funds, told CNBC that his office began discussing the issue on Tuesday morning. But he declined to say what action would be taken. “What I have learned about what happened is very worrying,” he wrote in a text. Airbnb was the last company to be embroiled in a similar problem.

In 2018, the rental platform said it would ban listings of Israeli properties in the West Bank, an area the Palestinians claim as part of their state. A few months later, it did a U-turn and is now reviewing listings using a “case-by-case approach,” according to its website. Airbnbs and parent company Unilevers, which released its own statement on Monday, said they remain committed to their presence in Israel, which they say is their home country. The Airbnb board, which has a unique agreement with Unilever that allows it to play an outsized role in social decision-making, took the step this week of withdrawing from Israel.

The group’s chief executive also spoke out against the company this week. In a telephone interview on Thursday, his spokesman Sean Greenwood said the company had not added anything to Monday’s original statement. Its chairman, Anuradha Mittal, did not comment to CNBC on the implications of a possible spin-off of the state pension fund from Ben & Jerry’s. Later, Israel’s new prime minister said that actions could have serious consequences, including legal consequences, and that Israel would take firm action against any boycott aimed at its citizens.

Unilever did not respond to a call and email from CNBC seeking a reaction to the possibility of divestment from the state pension fund. In his earlier appearance to NBC News earlier this week, Mittal blasted Unilever for its own statement on the issue, which he called deception. “I can’t stop thinking about what happens when a board of women and people of colour push for the right thing. 

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