Unilever, on Wednesday, sold its Ben & Jerry's ice cream business in Israel to its local licensee for an undisclosed sum, aiming to smooth over a potentially damaging diplomatic row, Reuters reports.
The deal comes after the US ice cream brand announced last year it would stop marketing products in the occupied Palestinian territories, saying that selling there was "inconsistent" with its values.
Israel condemned the move as "morally wrong" and said Unilever would face "severe consequences". The consumer goods giant defended Ben & Jerry's autonomy, but said it was "fully committed" to Israel and would find a solution by the end of this year.
Under the new arrangement, welcomed by Israel, Ben & Jerry's ice cream will be available to all consumers in Israel and the occupied West Bank.
The new owner is the brand's long-time Israeli ice cream licensee, Avi Zinger, owner of American Quality Products. Zinger had sued Ben & Jerry's after its decision in the West Bank, saying the company illegally severed their 34-year relationship.
"The new arrangement means Ben & Jerry's will be sold under its Hebrew and Arabic names throughout Israel and the West Bank under the full ownership of its current licensee," Unilever said.
Ben & Jerry's and its independent board maintained the right to decide on its social mission when it was bought by Unilever in 2000. But Unilever said it "reserved primary responsibility for financial and operational decisions and, therefore, has the right to enter this arrangement."
Israel captured and occupied the West Bank in a 1967 Middle East war. Palestinians want the land for a future State. Most countries consider Israeli settlements on Palestinian land to be illegal. Israel disputes this.
The Israeli boycott, divestment and sanctions movement (BDS) praised the move last year by Ben & Jerry's, saying at the time it was "a decisive step towards ending the company's complicity in Israel's occupation and violations of Palestinian rights".
Israel's Ministers of Foreign Affairs and the Economy said in a statement they appreciated "the constructive and respectful manner in which Unilever worked to resolve this issue, and the very strong stand the company has taken against anti-Semitism and the BDS agenda".
Ben & Jerry's is well known for its commitment to social justice that has recently included strongly supporting the Black Lives Matter movement, LGBTQ+ rights and electoral campaign finance reform.