Unilever’s Stock Takes Nose-Dive Since Ben & Jerry’s Boycott of Israel; Activist Investor Spotlight’s Company’s Financial Risk

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Unilever company. Credit: Unilever.com.

By: Fern Sidman

Since the iconic Ben & Jerry’s ice cream brand made the ill fated decision to boycott Judea and Samaria in Israel, things are looking so good for their parent company, Unilever. According to a report in the Wall Street indicated that the company has now decided to sideline plans to sell a string of personal care and beauty products, due to the fact that there is little interest amongst consumer of these products. The WSJ has reported that people familiar with this matter have said that this represents a setback to Unilever which has been under pressure to accelerate growth.

The consumer goods giant is the owner of Dove and Lever soap and at the start of 2021 has been takings such brands as Caress, Q-Tips, TIGI, Timotei, Impulse and Monsavon and creating a new brand for them known as Elida, as was reported by the WSJ.

Because Unilever has been struggling, they are apparently expressing a strong interest in selling of their brands and have hired advisers to explore this possibility. Sales of the aforementioned items collectively generated sales of about $695.7 million last year, as was reported by the WSJ.

Sources with knowledge of the matter have told the WSJ that Unilever is currently in the process of selling its tea business and in 2018 they sold its spreads arm division which has been suffering from lower growth in sales.  The WSJ reported that the company’s beauty and personal care line which consisted of   largely regional brands across North America and Europe could not attract a high enough bid to sell, so the bundling of the products under a different name began.

Over the last year, share prices of Unilever have dropped precipitously and the decision to put the sale of the personal care and beauty items on hold, does not bode well for the London-based company. In the area of packaged food and hygiene products, the WSJ has reported that analysts have said that they have underperformed as compared to competitors during the coronavirus pandemic.  The report also indicated that Nestle SA has seen its share prices rise as its volume has grown, whereas Unilever has seen their volumes go down but growth in sales is based entirely on price. This trend does not instill company confidence amongst investors.

The WSJ reported that, “to boost its performance, analysts have called on Unilever to produce more innovations and sacrifice profit margin to fund sales growth, while refining its portfolio by trimming underperforming brands and acquiring higher-growth businesses.”

In other Unilever news, the New York Post reported that one activist investor has taken a stake in Unilever and has said that the boycott of the Judea and Samaria region of Israel is saying the ice cream maker’s boycott of Judea and Samaria in Israel is to blame for a sharp drop in the company’s share price,

The investor, Michael Ashner, who runs the Winthrop Capital Partners fund has acquired an undisclosed stake in Unilever, as was reported by the Post. The report indicated that he is on a campaign of sorts to cajole other Unilever share holders to convince the consumer goods giant to immediately put an end to the boycott and to continue to conduct business and sell ice cream in that part of Israel, which some say are disputed Israeli-Palestinian territories.

Ashner has said, according to the Post report, that Unilever’s management of Ben & Jerry’s lacks responsibility. As such, he has been conducting meetings with financiers and legislators to spotlight the egregious direction that Ben & Jerry’s has taken under Unilever and he has launched the Coalition to Hold Unilever Accountable.

Because the board of Ben & Jerry’s has made the decision to boycott Judea and Samaria, Ashner is of the belief that this policy severely hurts Unilever’s broader business.

The Post reported that Ashner said that Unilever has not fully acknowledged the financial risks of being associated with a boycott of Israel’s “disputed” territories as this issue has been hotly debated and sparks international controversy.

Speaking to the Post, Ashner said that, “Unilever is knowingly misleading its shareholders by failing to disclose in its regulatory filings the material risks to its business and valuation.”

Based on his calculations, Ashner said, “The proposed termination of sales of its ice cream in the occupied West Bank and East Jerusalem of Israel has, among other things, directly resulted in the divestment and proposed divestment of more than $325 million of Unilever shares by a number of states, as well as proposed boycotts of Ben & Jerry’s and Unilever products.”

It is unknown as to what the value of Ashner’s stake in Unilever is.

In July of this year, Ben & Jerry’s has said it would cease selling its products in Judea and Samaria. Following this announcement, pro-Israel organizations called for a boycott of Ben & Jerry’s ice cream and even considered asking that the kosher certification that the product has be revoked.

The Post reported that “Unilever’s stock traded on the New York Stock Exchange has fallen about 13 percent and lost about $20 billion in market value as various funds — including the New York state pension fund — have said they will pull money out of Unilever.”

The Post reported that The New York State Common Retirement Fund, for instance, said it would pull $111 million in investments from Unilever last month.

Ashner has also contacted the Securities and Exchange Commission, asking federal regulators to look into alleged disclosure violations, as was reported by the Post. Moreover, he has also contacted the office of New York Governor Kathy Hochul to make sure the state follows through on its promise to pull money out of Unilever.

On August 3rd of this year, the Executive Director & Chief Investment Officer of the Florida State Board of Administration (SBA), Ash Williams, notified Governor Ron DeSantis that Ben & Jerry’s parent company Unilever has been added to Florida’s List of Scrutinized Companies that Boycott Israel. On July 22nd, Governor DeSantis sent a letter to Mr. Williams requesting that the SBA initiate the process of placing Ben & Jerry’s and its parent company Unilever on the list following the company’s announcement that it would remove its products and prohibit the sale of its ice cream in Judea and Samaria. If a company does not cease its boycott of Israel within 90 days of being placed on the list, it becomes subject to an investment prohibition and the State of Florida will not contract with the company or its subsidiaries.

“As a matter of law and principle, the State of Florida will not tolerate discrimination against the State of Israel or the Israeli people,” said Governor Ron DeSantis. “By placing Ben & Jerry’s Fortune 500 parent company Unilever on our List of Scrutinized Companies that Boycott Israel, Florida is sending a message to corporate America that we will defend our strong relationship with the Jewish State. I will not stand idly by as woke corporate ideologues seek to boycott and divest from our ally, Israel.”

“Israel is a friend of Florida, it’s a thriving democracy with incredible people and culture and Ben & Jerry’s decision to very publicly discriminate against Israel was a shortsighted attempt to virtue signal to folks on the radical left,” said CFO Jimmy Patronis. “Thanks to Governor DeSantis for upholding Florida law and sending a strong message to companies everywhere that if you’ve got a problem with Israel, the State of Florida has a problem with you. The second Ben & Jerry’s decided to discriminate against Israel, it affected Florida’s ability to make investments with its parent company. We’ll continue working with the SBA to ensure Florida law is upheld for those who target our friends in Israel.”

Ashner told the Post that the “boycott evinces a specific animus towards Israel by the Ben & Jerry’s board.” He said the ice cream maker had a history of taking political stands and “designating causes in furtherance of its deemed social agenda.”

The Post reported that a representative for Ashner’s coalition said that Ben & Jerry’s actions are anti-Semitic and are intentionally calculated to support the boycott, divestment, and sanctions (“BDS”) movement, which threatens Israel’s sovereignty and security.

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