Ben & Jerry's independent board said on Wednesday that parent company Unilever, with which it is locked in a dispute over the sale of its Israeli business, had frozen its directors' salaries in July as a pressure tactic ahead of a mediation on the matter, Reuters reported.
The ice cream maker surpassed $1 billion in sales last year for the first time, becoming one of 13 Unilever brands to achieve such a scale, the board also said.
On July 5, Ben & Jerry’s sued Unilever in a bid to block the sale of the Israeli business to local licensee Avi Zinger, saying Unilever had guaranteed Ben & Jerry's the right to protect its brand when buying the company in 2000.
The sale would allow Ben & Jerry’s ice cream to be sold in Judea and Samaria, circumventing Ben & Jerry’s controversial boycott of Israeli towns in Judea and Samaria, which caused an uproar last year.
"This decision for us to go to court is because of Unilever's sale without our input, which is a clear violation of the letter and the spirit of our original acquisition agreement with Unilever," board chairperson Anuradha Mittal said in an interview with Reuters.
"If Unilever is willing to so blatantly violate the agreement that has governed the parties' conduct for over two decades, then we believe it won't stop with this issue."
"If left unaddressed, Unilever's actions will undermine our social mission and essential integrity of the brand, which threatens our reputation and ultimately our business as a whole," she added.
Unilever said in a statement that it reserved primary responsibility for financial and operational decisions under the terms of its acquisition agreement of Ben & Jerry's, and "therefore has the right to enter this agreement with Avi Zinger."
Ben & Jerry's and Unilever last month tried to reach an out-of-court deal on the spat but on Monday notified a federal court they had failed to do so.
A hearing on Ben & Jerry's request to block the sale is scheduled for Monday, Aug. 8.