Unilever sued by US shareholder over Ben & Jerry’s Israel boycott

UNILEVER was sued by a US shareholder last night over claims that the company mishandled the decision by Ben & Jerry’s to stop selling ice cream in Israeli-occupied Palestinian territories.

According to the proposed class action in Manhattan federal court, Unilever improperly concealed the decision before it was announced, recognising that many US states might divest from companies that support anti-israel boycotts, yet stood behind it once the news became public.

Ben & Jerry’s announced last July that it would stop selling its products in the Israeli-occupied West Bank and parts of East Jerusalem, and sever its three-decade relationship with an Israeli ice cream maker that rejected the ban.

The lawsuit was filed by the City of St Clair Shores Police and Fire Retirement System, a Michigan pension fund. Unilever was contacted for comment.

The company was also facing criticism from one of its largest shareholders yesterday, who claimed the consumer goods giant was suffering from “long Covid” that had left its performance “pedestrian”.

Nick Train, from Lindsell Train Investment Trust, said the company “looks to have contracted a case of ‘long Covid’”, citing its exposure to emerging markets.

Unilever makes two thirds of its revenues in emerging markets where sales are “recovering slowly, if at all in some cases”. This has left Unilever’s financial performance “pedestrian in comparison to some peers”, Mr Train said in an investor update. He highlighted the company’s “undoubted vulnerability to rising input costs” as a continuing issue.

Mr Train called on Unilever chief executive Alan Jope to “build further value for shareholders by periodic acquisitions” and “by growing existing still promising brands such as Ben & Jerry’s, Dermalogica, Dove, Hellmann’s and Magnum”. Lindsell Train is Unilever’s 10th largest shareholder, according to Bloomberg data. Late last year Mr Train labelled Unilever’s results “crushingly pedestrian”.

The criticism comes amid growing pressure from shareholders for a shake-up at the FTSE 100 company, which has seen its share price slump 16pc over the past year.

Fundsmith’s Terry Smith, another major shareholder, recently claimed Unilever had “lost the plot” and was too focused on ESG concerns at the expense of performance.

Unilever has also attracted the attention of the activist investor Nelson Peltz, whose New York hedge fund Trian Fund Management recently built up a 1.5pc stake in the business, becoming Unilever’s fourth largest investor.

Mr Peltz is known for pushing through carve-ups at consumer goods businesses and has previously conducted activist campaigns at Procter & Gamble, Pepsico and Danone.

Unilever is already in the midst of a restructuring aimed at reviving growth, slashing 1,500 jobs and splitting the company into five new divisions.