The Magnum Ice Cream Company has decided Ben & Jerry’s chair Anuradha Mittal “no longer meets the criteria” to serve in her board role as the long-running feud between the group’s parent, Unilever, and one of its billion-euro ‘power brands’ took another twist this week.
The ice cream division of Unilever disclosed the information in filings made to the US Securities and Exchange Commission (SEC) on Tuesday ahead of Magnum’s planned €15bn demerger later this year.
“The group has taken a proactive approach to finding common ground with the Ben & Jerry’s board and its members to avoid future conflicts of the type that have arisen in the past,” the documents said.
“However, following investigations commissioned by the group, and conducted by external advisors, in the opinion of the group the current chair of Ben & Jerry’s no longer meets the criteria to serve as a member of the board. The group has informed the Ben & Jerry’s board about the results of the internal investigations. The group will consider its options depending on the response it receives from the Ben & Jerry’s board.”
The reasons for the investigation into Mittal are not made clear.
Magnum said the findings were “not expected to have a material impact on the operations of Ben & Jerry’s or the group”, but they could lead to reputational damage, consumer boycotts, investor claims or adverse shifts in consumer behaviour.
“They may also give rise to further legal claims being brought against the group instigated by the Ben & Jerry’s board or its individual members.”
Ben & Jerry’s conflict with Unilever
The Magnum Ice Cream Co is set to start trading shares on the Amsterdam stock exchange on 8 December, with secondary listings in New York and London. The spin-off has been delayed by a month due to a government shutdown in the US.
Unilever’s spat with Ben & Jerry’s has overshadowed the process, with tensions growing as the brand’s board has become more outspoken about the war in Gaza.
The brand’s co-founders intervened when Magnum held an investor day in September to call for Ben & Jerry’s to be sold. Ben Cohen and Jerry Greenfield wrote an open letter to investors and the Magnum board claiming the brand’s freedom to pursue its social mission had been limited by Unilever.
Ben & Jerry’s board have previously filed a legal complaint against Unilever, alleging the parent company had breached its acquisition agreement, signed in 2000, to allow the brand certain autonomy for social causes.
Greenfield resigned in protest over the alleged censorship in September.
Magnum said, in the SEC filing this week, the governance structure of Ben & Jerry’s “may pose certain risks to the reputation and operations of the group”.
It added the rights Ben & Jerry’s held were limited to issues such as improving packaging to be more sustainable, opposing the use of growth hormones and GM organisms, and donating to philanthropic causes.
“Although the Ben & Jerry’s social mission objectives have evolved and may evolve from time to time, the evolution must be consistent with Ben & Jerry’s historical social mission, as reflected in this list of priorities,” Magnum said.
“There exists the potential for misalignment between decisions taken or public statements made by the Ben & Jerry’s board, its members or others associated with Ben & Jerry’s (such as the co-founders), and the decisions taken or public statements made by the group.
“If Ben & Jerry’s decides to pursue or promote certain social initiatives or causes (as they have done in the past), this may lead to increased costs, adverse publicity or legal or operational challenges for the group. If these initiatives are perceived negatively by the public, they could result in reputational damage, consumer boycotts of products, investor claims or adverse shifts in consumer behaviour.”
‘Stifling the social mission’
Ben & Jerry’s co-founder Ben Cohen said today the actions taken by Unilever and Magnum were “a deliberate attempt to rewrite history” and strip the independent board of the legal authority it was guaranteed.
“When Ben and Jerry’s was sold in 2000, Jerry and I fought successfully to enshrine in the merger agreement that the independent board would have primary responsibility for safeguarding the quality of our product, brand marketing, licensing and use of the trademark, in addition to the social mission, in perpetuity.
“It was done to stop exactly this kind of corporate interference in the brand’s integrity. Now Unilever/Magnum are eroding those protections from within, and targeting Anuradha Mittal, a person of enormous courage and principle, simply for standing up for what’s right.”
Cohen added the SEC filings attempted to replace the binding language of the deal agreement.
“This is not governance. It’s a power grab to stifle the social mission, which will, in turn, destroy the long-term value of the brand.”
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